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UK mortgage approvals fell for the fifth consecutive month in January, figures from the Bank of England showed on Wednesday.
Net mortgage lending to individuals decreased to £2.5 billion in January from £3.1 billion in December.
Net mortgage approvals for house purchases decline for the fifth consecutive month, falling to 39,600 in January from 40,500 in December.
‘If the onset of the Covid-19 pandemic and period immediately thereafter is excluded, this was the lowest approvals since January 2009 [which was 32,400],’ the BoE said.
The effective interest rate on newly draw mortgages, meaning the actual interest rate paid, rose by 21 basis points to 3.88 in January from 3.67% in December.
On the outstanding stock of mortgages, it rose 4 basis points to 2.54%.
The BoE’s own benchmark interest rate is 4.00%, following a 50 basis point hike at the beginning of February.
The Bank of England will next meet on March 23 to decide upon interest rates going forward.
Effective interest rates stood at 3.35% in November, having risen from 3.09% in October and 2.84% in September.
Net borrowing of mortgage debt by individuals decreased to £2.5 billion in January from £3.1 billion in December.
The BoE noted consumers borrowed another £1.6 million in consumer credit in January, down from £800 million borrowed in December.
‘This was split between £1.1 billion of borrowing on credit cards and £500 million of borrowing through other forms of consumer credit,’ the BoE said.
This was the highest net borrowing by individuals since June 2022.
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