UK mortgage approvals sink to lowest since Nov 2014 in August: BOE

[LONDON] British mortgage approvals fell to their lowest level since Nov 2014 last month as the housing market continued to slow after June's vote to leave the European Union, Bank of England data showed on Thursday.

But the BOE figures also showed lending to consumers continued to grow rapidly, expanding at a rate close to the 10-year highs seen in previous months.

Mortgage approvals for house purchases numbered 60,058 in August, down from 60,925 in July. Analysts in a Reuters poll had forecast 60,150 mortgage approvals for August.

Less comprehensive figures from the British Bankers' Association released on Monday had shown the number of mortgages approved by banks fell to the lowest since Jan 2015 in August.

Before the referendum, Britain's government warned that a vote to leave could reduce a projected rise in house prices by 10 percentage points, and last month the BOE said it expected monthly mortgages approvals to fall to 56,000 in the second half of the year - the lowest since early 2013.

More recently, however, the BOE has said the housing market is not slowing as much as it expected, especially outside London, and the Royal Institution of Chartered Surveyors has said prices look set to continue to rise.

Net mortgage lending, which lags approvals, rose £2.943 billion (S$5.22 billion) in August, the BOE said, more than a forecast of £2.55 billion in the Reuters poll.

The BOE said consumer credit grew by £1.574 billion. Economists had expected an increase of £1.4 billion.

On a three-month basis, lending grew at an annualised rate of 10.4 per cent, the same as in July and not far off a previous peak set shortly before the referendum.

REUTERS