UK Mortgage Approvals Drop Slightly
31 Maggio 2024 - 8:50AM
RTTF2
UK mortgage approvals decreased marginally in April and
households made record deposits in individual savings accounts or
ISAs to take advantage of higher interest rates, data released by
the Bank of England showed on Friday. The number of mortgage
approvals dropped to 61,100 from 61,300 in March. Approvals were
forecast to rise to 61,500.
Data showed that the effective interest rate on newly drawn
mortgages climbed slightly by a basis point to 4.74 percent in
April.
Mortgage lending increased to GBP 2.4 billion in April, while it
was seen unchanged at GBP 0.5 billion.
The annual growth for net mortgage lending was 0.2 percent, in
contrast to the 0.1 percent fall in March. This was the first
annual increase since October 2022.
Gross lending rose slightly to GBP 20.6 billion from GBP 20.5
billion in March, its highest level since January 2023.
Net consumer credit borrowings halved to GBP 0.7 billion from
GBP 1.4 billion a month ago. The expected level was GBP 1.5
billion. The fall reflects lower net borrowing through credit cards
and through other forms of consumer credit.
Businesses repaid GBP 1.1 billion of loans to banks and building
societies, slightly up from GBP 0.9 billion in March. Borrowing by
large businesses decreased 0.3 percent and lending to SMEs slid 4.6
percent annually in April.
Further, data showed that households' holdings of money
increased GBP 8.4 billion in April, the highest flow since
September 2022.
Households deposited an additional GBP 11.7 billion into tax
free ISAs, the highest on record.
Capital Economics' economist Ashley Webb said money and lending
figures indicate that the recent rebound in the housing market is
cooling and households reined in their spending in April.
However, the economist still think interest rate cuts starting
in the summer and further falls in inflation will mean the economic
recovery this year will be stronger than most expect.
In May, the BoE had kept its interest rate unchanged for the
sixth straight meeting at 5.25 percent, which was the highest since
early 2008. The bank also signaled that the first rate cut since
2020 is on the horizon.
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