UK house prices are bearing up despite another fall in mortgage approvals in January, new data from the Nationwide building society and the Bank of England suggested on Tuesday.

The Nationwide’s monthly-index, which can be volatile, showed a 0.5 per cent price increase between January and February. The annual rate of increase continued to slow down to 10.2 per cent, half the level of only seven months ago.

The Bank of England reported 79,000 mortgage approvals in January, which was close to a nine-year low of 76,000 hit in November. The overall amount lent to individuals for house purchases was 0.8 per cent higher than in December.

John Butler at HSBC said: “So far the correction in the housing market is taking the form of a sharp drop in transactions, as prices prove sticky. Until there is a more material trigger - like a greater than expected rise in interest rates or unemployment - that trend is likely to continue.”

This sentiment was echoed by Alex Bannister, Nationwide group economist, who said: “The likelihood remains that price growth [this year] will be muted with small rises in some months being offset by small falls in others.”

A survey carried out by the building society last month found that homeowners expect prices to rise by just 1 per cent over the next six months. Confidence had declined sharply in the second half of last year, but has been stable since.

Tuesday’s Bank of England lending figures also revealed a surprising increase in the amount of consumer credit, which comprises lending to individuals that is unsecured against property such as private loans.

There was a surprising 1.3 per cent increase in January, resulting in the fastest annual growth rate since August. According to Mr Butler: “Households still seem keen to accumulate debt, albeit at a slower pace than the first half of last year.”

The data buoyed the British pound, which held firm on the foreign exchange markets. Household spending has been identified by the Bank of England’s monetary policy committee as the key risk to economic risk this year.

The average property in the UK was worth £152,900 in February, according to the Nationwide, which uses the size of approved mortgages to measure housing market trends.

Overall new lending to individuals amounted to £9.5bn in January, of which lending secured on property was £7.3bn while consumer credit totalled £2.3bn, the Bank of England said. Total new lending had been £8.5bn in December.

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