Mortgage approvals dip
MORTGAGE approvals fell more than expected in June and lending was also weaker than forecast, Bank of England figures showed.
The Bank of England said mortgage approvals – a gauge of house prices in the future – numbered 47,643 in June, falling from a downwardly revised 49,461 in May and below forecasts for a reading of 49,000.
Net mortgage lending growth eased to £665m in June from £838m in May, below forecasts for £1bn.
And consumers unexpectedly repaid £98m of unsecured credit.
The figures support recent evidence suggesting the housing market is running out of steam after strong rises last year.
Mortgage lender Nationwide reported a 0.5 per cent drop in house prices this month and said worries about the government’s austerity measures was putting off buyers.
Bank of England Governor Mervyn King on Wednesday pointed to continued weak credit flows as a major risk to Britain’s economic recovery and said the upturn was not assured, despite stronger-than-expected growth in the second quarter.
Separate figures showed the Bank’s preferred money supply gauge – M4 excluding intermediate other financial corporations – slowed markedly in June, rising by just 0.2 per cent on the month, the lowest since January.
On a three-month annualised basis, lending on this measure eased to 6.0 percent in June from 8.9 per cent in May.
These figures are looked at to gauge how effective the Bank’s asset purchase programme has been in boosting cash-flows in the wider economy.