Mortgage approvals tumble to a 15-month low, report reveals
THE NUMBER of homebuyers receiving mortgage approvals hit a 15-month low in November, according to a high street banking report.
In the same month that the Bank of England base rate was hiked from 0.25 per cent to 0.5 per cent, the number of mortgage approvals for house purchase stood at 39,507 – the lowest figure since August 2016.
But there were also 33,670 remortgaging approvals – higher than the average seen over the previous six months and a 24 per cent increase compared with November 2016, the figures, released by trade association UK Finance, show.
Howard Archer, chief economic adviser at the EY Item Club, said: “November’s drop in mortgage approvals to a 15-month low reinforces our belief that there is unlikely to be a significant upturn in housing market activity any time soon. Housing market activity is being pressurised by weakened consumer purchasing power and substantial consumer wariness over engaging in major transactions.
“Potential housebuyers are also likely concerned by the Bank of England hiking interest rates in November.”
Households’ credit card borrowing continued to grow in November – but there are signs indicating many firms are shoring up wealth rather than borrowing to invest, according to the report.
Annual growth in credit card borrowing stood at 5.3 per cent in November, up from five per cent the previous month.
In contrast to the credit card figures, the annual growth rate in borrowing using personal loans and overdrafts weakened, from minus 2.8 per cent to minus 3.1 per cent.
Overall, the annual growth rate in consumer credit remained at 0.9 per cent – the same as the previous month.
UK Finance’s managing director of commercial and personal finance, Eric Leenders, said business borrowing has continued to moderate through 2017.