UK mortgage approvals stage biggest jump in over six years

[LONDON] British mortgage approvals jumped by the most in more than six years in April, the Bank of England said on Tuesday, the latest sign of a bounce-back in the country's housing market.

The BoE figures also showed growth in lending to consumers remained strong, underscoring the lop-sided nature of Britain's economic recovery.

Mortgage approvals for house purchases numbered 68,076 in April, hitting their highest level in 14 months and up strongly from 61,945 in March.

The BoE said the monthly increase was the biggest since February 2009.

Analysts in a Reuters poll had forecast 63,000 mortgage approvals were made in April.

The number of approvals fell throughout most of 2014 as regulators introduced new controls on mortgage lending, cooling house price growth and easing concerns about a bubble in the housing market.

But there have been signs that the housing market is heating up again. Mortgage approvals have risen in four of the last five months and the pace of price rises has picked up.

Net mortgage lending, which lags approvals, rose by a less than expected 1.735 billion pounds in April, the BoE said, slowing from March.

The BoE said consumer credit grew by 1.173 billion pounds in April. Economists had expected an increase of 1.0 billion pounds after consumer lending jumped by nearly 1.3 billion pounds in March, its biggest increase since February 2008.

Despite only weak rises in wages for much of the past five years, Britain's economic recovery has relied largely on spending by households.

The strong levels of consumer demand now contrast with a weaker outlook for British manufacturers. A survey of the factory sector published on Monday showed activity in May only inched up from a seven-month low touched in April.

The BoE said lending to non-financial businesses fell by 1.631 billion pounds, reversing much of a 2.719 billion-pound increase in March.

REUTERS