Total lending up £2bn in January but approvals slump

The increase in the total lending secured on dwellings was more than the December increase of £1.2bn and the previous six-month average of £1bn.

However, according to the Bank, the number of loan approvals for house purchases stood at 48,198, which was less than the December figure of 58,223 and below the previous six-month average over 55,924.

In addition, loan approvals for remortgages were less than in December at 23,611 and less than the six-month average of 27,226.

The 12-month growth rate for lending to individuals ticked up to 0.8 per cent, and the three-month annualised growth rate was 1.3 per cent - a 0.4 percentage point increase from a revised 0.9 per cent for December.

Elsewhere, consumer credit increased by £0.5bn, more than the previous six-month average of a net repayment of £0.2bn, and also more than December's net increase of £0.3bn.

Credit card lending increased by £0.2bn and other loans and advances increased by £0.3bn.

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: "January's figures are down on December for both loan approvals and remortgages, but a drop off in the first month of the year is the norm.

"January 2010 was hit particularly hard by the end of the stamp duty holiday in December and the arctic weather conditions, particularly in the first half of the month. The dreadful weather was a key factor in the January mortgage drop-off."

However, Mr Murphy added: "What is more important is that the mortgage market picked up sharply in February, driven by a wider range of new products coming onto the market.

"Product availability is up by around 30 per cent since the beginning of the year and lenders are starting to compete at higher loan-to-values (LTVs).

"Lenders are still very conservative in their criteria but, overall, the environment for borrowers is much improved on six months ago."