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Net mortgage lending stalled in the UK in March, according to Bank of England data on Thursday, while mortgage approvals continued to rise.
Mortgage lending to individuals fell to net zero in March from a net flow of £700 million in February.
‘Looking at the period prior to the onset of Covid-19 in March 2020, this is the lowest level of net borrowing since June 2011 (£300 million of net repayment),’ the BoE said.
However, net approvals increased for the second month in a row, reaching 52,000 in March compared to the upwardly revised figure of 44,100 the month before.
March’s figure was higher than FXStreet-cited market consensus of 46,250.
The effective interest rate on newly draw mortgages, meaning the actual interest rate paid, increased to 4.41% from 4.24%. On the outstanding stock of mortgages, it rose to 2.73% from 2.64%.
The BoE’s own benchmark interest rate is currently 4.25%, following a 25 basis point hike in late March. However, it was 4.00% for most of March.
The BoE noted individuals borrowed a further £1.6 billion in consumer credit in February, compared to £1.5 billion the month before.
‘The additional consumer credit borrowing in March was split between £700 million of borrowing on credit cards, which was broadly unchanged from February, and £900 million of borrowing through other forms of consumer credit (such as car dealership finance and personal loans),’ it said.
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