UK banks approve most mortgages since 2015

London

BRITISH banks approved the highest number of mortgages in more than four years in December, said industry group UK Finance, adding to signs of a turnaround in the country's housing market since last month's general election.

Mortgage approvals for house purchase hit 46,815 last month on a seasonally-adjusted basis, the most since August 2015, according to UK Finance's data.

The value of mortgage lending rose by the most since March 2016, shortly before voters decided to leave the European Union, up by a net £3.773 billion (S$6.67 billion).

"December's jump in mortgage approvals adds to a growing amount of firmer data and survey evidence suggesting that the housing market could well be changing up a gear after a lacklustre 2019," Howard Archer, an economist with forecaster EY ITEM Club, said.

The Bank of England is discussing this week whether to cut interest rates in response to weak economic data at the end of 2019, or put faith in early signs of a recovery since the election.

Earlier this month, the Royal Institution of Chartered Surveyors said Britain's housing market got a boost from Prime Minister Boris Johnson's big election win, with agreed home sales rising for the first time since May 2019.

But there were also signs of caution among households in UK Finance's data.

Consumer credit grew by an annual 4 per cent in December, the joint weakest pace since April last year, and credit card lending was up by 2.4 per cent, its second-weakest performance since late-2014. REUTERS