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LONDON, July 29 (Reuters) - British mortgage approvals picked up in June and were stronger than expected after falling for the previous four months while banks introduced more stringent checks on borrowers.
The Bank of England said on Tuesday that mortgage approvals numbered 67,196 last month, up from 62,007 in May.
Analysts had forecast a smaller rise in approvals to 62,600.
Monthly mortgage approvals are still short of the 90,000 level seen before the 2008 financial crisis, and below a recent peak of just over 76,000 in January.
But house prices have risen rapidly in recent months amid a shortage of new home-building.
BoE Governor Mark Carney has said that housing is the biggest domestic threat to Britain's economic recovery given the risks of borrowers taking on too much debt. He says controls on bank lending will be the first line of defence against a housing bubble, rather than an increase in interest rates.
The BoE said on Tuesday that mortgage lending in June rose by 2.1 billion pounds, easing off a bit from May and a touch higher than the forecast in the Reuters poll.
As well as the more exhaustive checks that banks are required to make on people seeking a mortgage which came into effect in April, the BoE announced in June that it was taking measures to prevent a build-up of risky debt.
The BoE has been seeking to cool the mortgage market since January when it refocused its Funding for Lending Scheme away from mortgage lending and dedicated it exclusively to business lending.
The BoE said lending to non-financial businesses slumped by 3.4 billion pounds in June, its biggest fall since November last year, compared with an increase of 2.3 billion pounds in May. Lending to small businesses alone edged up by 235 million pounds.
Unsecured lending to consumers rose by 418 million pounds, about half the increase forecast in the Reuters poll and the lowest increase since January 2013.
The BoE's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.5 percent on the month, taking the annual growth rate to 3.9 percent. (Reporting by William Schomberg and Tess Little)