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Last Updated: Thursday, 4 January 2007, 11:25 GMT
Mortgage deals near 3-year high
Bank of England
Mortgage lending is at near record levels, says the Bank of England
UK mortgage approvals have climbed to their highest level in almost three years, Bank of England figures show.

Mortgage lenders approved 129,000 new loans for house purchases in November, which was the highest figure since the end of 2003, the Bank said.

The amount of money lent in the form of mortgages during November was the second highest on record at 9.8bn.

The figures support evidence of strong house price growth and point to a steady market in 2007, analysts said.

However, Howard Archer at Global Insight warned that the market might cool off following November's rise in interest rates.

"We suspect that with so many people stretched to the limit in buying a house, even a modestly small cumulative rise in interest rates will ultimately have a substantial dampening impact on housing market activity," he said.

According to the Bank, the record value for monthly mortgage lending was set in September 2003 at just under 10bn.

Growing debt

The Bank's figures also pointed to a slowdown in the rate at which personal debt was rising.

The total amount of money owed by citizens in the UK now stands at 1.278 trillion.

Most of this, some 1.066 trillion, is in the form of mortgages.

The other 212bn that is owed is in the form of credit-card borrowing, bank loans, overdrafts and hire-purchase agreements.

The Bank said that this element, known as consumer credit, was now growing at its slowest rate since statistics were first published in 1994.

Consumer credit increased by 6.2% in November, the Bank said, adding that it was half the rate of growth recorded in the summer 2005.

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