The recovery in Britain's housing market is advancing, but small and medium-sized businesses are struggling to get credit, highlighting why the Bank of England has shifted a stimulus programme away from property. H ouse prices in November rose at their fastest pace in three years and mortgage approvals hit a nearly six-year high last month. But lending to businesses contracted by more than 3 per cent in the three months to the end of October, Bank of England data showed. "The numbers suggest that, despite the medium-term risk of a housing bubble, banks are much more willing to take a punt on the housing market than on small and medium-sized enterprises," said Carl Astorri, an economist with the EY Item Club, an economic forecaster. "The change in policy direction should help to get the UK growth engine firing on all cylinders, as well as decrease the risk of a housing bubble developing over the medium term." On Thursday, the BoE unexpectedly said it was ending incentives for banks to provide mortgages as part of its Funding for Lending scheme (FLS) and would focus the scheme exclusively on lending to businesses. BoE Governor Mark Carney played down any immediate risks from rising housing prices, which have been much stronger in London and the south east of England than elsewhere. But he said it was time to take the foot off the accelerator when it came to encouraging banks to offer mortgages. Data last week showed mortgage approvals for house purchases rose to 67,701 in October from 66,891 in September. That was its highest level since February 2008, though below a pre-crisis average of around 90,000. Economists in a Reuters poll had expected a bigger increase to 68,500 approvals during October. While the BoE and the government are refocusing the FLS scheme away from housing, another government programme to encourage mortgage lending is just getting under way. Last month saw the launch of state guarantees for low-deposit mortgages under Help to Buy programme. Prime Minister David Cameron said last month that 2,000 homebuyers had obtained mortgages through Help to Buy schemes since the second phase was launched. Critics say the plan won't help spur new building much and will only push up prices. House prices rose 6.5 per cent in the 12 months to November, according to a survey by mortgage lender Nationwide. That was the biggest increase since July 2010 and larger than economists had expected, though they are still about 6 per cent below their peak in late 2007. With the economy growing at an annualised rate of more than 3 per cent, property prices look set to rise further. By contrast, business lending has not taken off as the BoE and the government hoped when they launched FLS last year. Friday's data from the Bank showed net business lending fell by £1.1 billion (HK$13.9 billion) in October and lending to small and medium-sized firms fell by £505 million. Manufacturers have called on finance minister George Osborne to do more to help businesses invest when he announces his half-yearly budget statement next week. Consumer credit grew at an annualised rate of 6 per cent in the three months to October, slowing from a month earlier. The £500 million increase in October alone was lower than the £650 million that economists had expected and was down sharply from £1.1 billion in September. Some economists said British households may have been holding back on spending ahead of the Christmas holidays. A separate gauge of consumer sentiment fell for a second month in November, the first back-to-back decline since the summer of 2011. The poll, by market research firm GfK, was conducted early last month, when steep rises in gas and electricity tariffs made headline news.