The number of mortgages taken out to buy homes reached its highest level in almost six years in December, figures from the Bank of England showed, as the housing market continued to gather speed despite the slide into winter. A total of 71,638 loans were approved for house purchase, above the previous six-month average of 65,001 and the highest monthly figure since January 2008 when the credit crisis and economic slowdown started to take hold of the market. The government's Funding for Lending scheme to offer cheap fund to banks and building societies, and the second part of Help to Buy which offers a taxpayer-backed guarantee on mortgages up to 95%, have both made home loans cheaper and more accessible to those with small deposits. The Bank said £12.4bn of new mortgages were approved for purchases, compared with the £8.3bn it reported in December 2012 . The figures for remortgaging were also up year-on-year, but remained broadly flat through the second half of 2013 with 34,754 loans worth £5.5bn approved. Total lending to individuals increased by £2.3bn in December, compared to the average monthly increase of £1.9bn over the previous six months. Mortgages made up most of the increase, with other consumer credit remaining muted in the run-up to Christmas. Credit card borrowing increased by just £135m, compared with £300m in November, while borrowing through overdrafts, personal loans and other consumer credit rose by £467m. Mark Harris, chief executive of mortgage broker SPF Private Clients , said the continued uptick in lending volumes and loan approvals in December was "no surprise". However, he said "the fact that these increases are significantly higher than the monthly average over the previous six months demonstrates the strong demand for mortgages and growing confidence in the housing market. "We expect this to continue this year as Help to Buy gets into its stride and lending appetites remain strong, with most lenders aiming to do more lending than they did last year." Howard Archer , chief UK economist at IHS Global Insight , said the Bank's figures, which followed data from the Land Registry and Nationwide building society showing strong house price growth, would "sustain concern that we are on the way to a new housing bubble". He said: "While mortgage approvals are still running below their long-term average, there is currently considerable upward momentum." Commenting on the consumer credit figures, he said: "While slightly reduced consumer borrowing in December modestly eases concern that consumers are building up their debt, it also fuels uncertainty as to how robust consumer spending will be over the coming months given that purchasing power is still being squeezed by inflation running clearly above earnings growth.
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