UK mortgage approvals fall to nine-month low in April
Reuters reports that British mortgage approvals fell more than expected in April to their lowest level in nine months, adding to signs that new rules on bank lending have taken some of the heat out of the housing market.
The Bank of England said on Monday that mortgage approvals numbered 62,918 in April, down from 66,563 in March, marking the third consecutive monthly slowdown.
It was the lowest number of monthly approvals since July last year, around the time when Britain's housing recovery was starting to pick up speed.
Analysts had forecast a fall in approvals to 64,750 as the new rules for banks offering mortgages left their mark.
The rules came into effect in late April, requiring lenders to make more stringent checks on the ability of borrowers to repay their loans. Several lenders were reported to have started introducing them over the previous months.
BoE data also showed another fall in business lending, despite attempts by the central bank to encourage banks to lend more to companies which could aid the economic recovery.
Monthly mortgage approvals are still short of the 90,000 level seen before the 2008 financial crisis, but house prices have risen rapidly amid a shortage of new home-building.
BoE Governor Mark Carney said last month that housing was the biggest threat to Britain's economic recovery.
The Bank's Financial Policy Committee is expected to announce later this month that it is taking further measures to control mortgage lending.
As well as the tighter rules for mortgage lending, the BoE has refocused its Funding for Lending Scheme away from mortgage lending and dedicated it exclusively to business lending.
The BoE said that lending to non-financial businesses shrank by 2.4 billion pounds in April, compared with a fall of 2.5 billion pounds in March. Lending to small businesses alone also contracted, down 0.6 billion pounds.
Unsecured lending to consumers rose by 0.7 billion pounds, a bit less than forecast in the Reuters poll and down from 1.0 billion in March.