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UK mortgage approvals pick up from 19-month low: BBA

Wednesday, October 26, 2016 - 17:18

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British banks approved more mortgages last month after the number of approvals fell to a 19-month low in August, while consumer lending grew at its fastest rate in nearly a decade, industry figures showed on Wednesday.

[LONDON] British banks approved more mortgages last month after the number of approvals fell to a 19-month low in August, while consumer lending grew at its fastest rate in nearly a decade, industry figures showed on Wednesday.

The British Bankers' Association said its members approved 38,252 mortgages for house purchase in September, down 15 per cent on a year earlier but up from 37,241 in August, which was the lowest level since January 2015.

"Mortgage approvals picked up slightly this month but the housing market continues to shows signs of underlying weakness," BBA chief economist Rebecca Harding said.

Consumer lending rose at the fastest rate since December 2006, driven by strong demand for credit cards, which saw a net 175 million pound (S$298 million) increase in lending in September.

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"Consumers are increasingly using short-term borrowing to take advantage of record-low interest rates. This trend has accelerated since the Bank of England cut rates in August," Ms Harding said.

Business lending declined, however, dropping by a net 312 million pounds in September, the biggest fall since June.

The BBA said this could be due to uncertainty about the implications of June's vote to leave the European Union, and the typically long period before cuts in BoE rates reduce the cost of business borrowing.

REUTERS

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