Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
UK mortgage approvals increased for the first time in six months in February, figures from the Bank of England showed on Wednesday.
Net mortgage lending to individuals fell to £700 million in February from £2.0 billion in January, hitting its lowest level since July 2021.
‘Looking at the period prior to the onset of Covid-19 in March 2020, this is the lowest level of net borrowing since April 2016,’ the BoE said.
However, net mortgage approvals increased for the first time since August 2022, reaching 43,5000 in February, compared to 39,6000 the month before.
This was higher that FXStreet-cited market consensus of 40,500.
The effective interest rate on newly draw mortgages, meaning the actual interest rate paid, increased to 4.24% from 3.88%. On the outstanding stock of mortgages, it rose to 2.64% from 2.54%.
The BoE’s own benchmark interest rate is currently 4.25%, following a 25 basis point hike last week. However, it was 4.00% for nearly all of February.
The BoE noted individuals borrowed a further £1.4 billion in consumer credit in February, compared to £1.7 billion the month before.
‘The additional consumer credit borrowing in February was split between £600 million of borrowing on credit cards, decreasing from £1.1 billion in January, and £800 million of borrowing through other forms of consumer credit (such as car dealership finance and personal loans),’ it explained.
Copyright 2023 Alliance News Ltd. All Rights Reserved.