UK Mortgage Approvals At 15-Month High
(RTTNews) - British mortgage approvals increased to a 15-month high at the start of the year, signalling that the impact of higher interest rates is fading in the property market.
Mortgage approvals for house purchases rose to 55,200 in January from 51,500 in December, the Bank of England said Thursday. Approvals were the highest since October 2022.
The actual interest paid on newly drawn mortgages fell by 9 basis points to 5.19 percent in January.
Data showed that individuals repaid a net GBP 1.1 billion of mortgage debt in January compared to GBP 0.9 billion in December. Mortgage lending was negative for the first time since the series began in March 1994.
Gross lending decreased to GBP 16.9 billion from GBP 17.2 billion in the prior month.
Consumer credit increased to GBP 1.9 billion from GBP 1.3 billion in December. This was mainly driven by higher borrowing through credit cards. Consumer credit posted an annual growth of 8.9 percent in January.
Businesses borrowed a net GBP 0.3 billion in January, up from GBP 0.1 billion in the previous month.
Data suggested that the drag on consumer spending and the housing market from higher interest rates is easing, which suggests an economic recovery, at least in some sectors, has already begun, economists at Capital Economics said.
The Bank of England had kept the monetary policy unchanged for the fourth straight session at a 15-year high in February. Markets are pricing in a rate cut in summer.
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