U.K. Mortgage Approvals Highest In More Than A Year

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The number of mortgage approvals for house purchase in the U.K. rose to their highest level in more than a year in June, data released by the Bank of England showed Wednesday.

The number of loans approved for house purchase totaled 47,584 in June, the highest since April 2008, larger than May's 44,169 and 47,000 expected by economists.

Meanwhile, the number of loans approved for other purposes stood at 29,509, which was also higher than in May.

Further, the central bank said total net lending to individuals rose GBP 0.4 billion compared to GBP 0.5 billion increase in May. The twelve-month growth rate continued to fall, down by 0.2 percentage points to 1.2% in June.

Within the total, the increase in net lending secured on dwellings was GBP 0.3 billion, unchanged from May. On an annual basis, lending secured on dwellings showed a 1.1% growth versus 1.3% in the prior month.

Consumer credit increased by a net GBP 0.1 billion in June, in line with the previous six-month average. Credit card lending increased by a net GBP 0.2 billion and other loans and advances fell GBP 0.1 billion.

Also on Wednesday, data released by the Building Societies Association or BSA showed that the value of mortgage approvals totaled GBP 1.81 billion in June, down from GBP 2.72 billion in last year. In May, building societies approved mortgages worth GBP 1.60 billion.

Brian Morris, Head of Savings Policy at the BSA, said, "Mortgage approvals show signs of stabilizing as they reached a year high of GBP 1.8 billion, but are more than 30% down on this time last year."

The BSA's gross lending was GBP 1.97 billion in June compared to GBP 3.25 billion last year. That was the highest level seen this year, and up 30% on May.

Last week, the British Bankers' Association reported that the number of mortgage approvals, on a seasonally adjusted basis, rose to 35,235 in June from 31,919 in May. Approvals increased for the third straight month and the June number is the highest since March 2008.

Another report from the BoE showed that M4 money supply increased 13.8% year-over-year in June, slower than the 16.3% growth in the previous month. On a monthly basis, it fell 0.2%.

The Bank of England cut interest rates to a record low and initiated a GBP 125 billion asset purchase programme to protect the economy from its worst crisis. The central bank is widely expected to keep the bank rate unchanged at 0.5% on August 6, but the focus of the meeting would be whether policy makers increase the size of the programme adding GBP 25 billion.

The number of mortgage approvals for house purchase in the U.K. rose to their highest level in more than a year in June, data released by the Bank of England showed Wednesday. (Market News Provided by RTTNews)