UK mortgage approvals surge in December
British banks approved the most mortgages in four years in December, data from banking body UK Finance has shown, in the latest sign of green shoots in the UK economy.
Yet mortgage lending in the UK fell in 2019 overall as the Britain’s housing market struggled under the weight of Brexit uncertainty, according to the statistics.
Uncertainty over what form Brexit would take put people off making big-ticket purchases in 2019, causing a rocky year for the housing market.
Boris Johnson’s thumping election victory in December provided some certainty over Brexit, however, causing house prices to jump in the final month of the year according to building society Nationwide’s gauge.
Mortgage approvals for house purchases hit 46,815 last month, the most since August 2015, chiming with indicators which have shown an economic uptick since the election.
However, the UK Finance data showed that banks and building societies lent a total of £265.8bn in 2019, down 1.1 per cent compared to 2018.
The number of mortgages approved rose 7.4 per cent to 982,000 in 2019 compared to 2018. Approvals for remortgages were 7.9 per cent higher over the same period.
“Transaction levels and overall lending volumes in 2019 were still low by historical standards, but in the circumstances they held up exceptionally well,” said Sam Harhat, head of financial services at Andrews Property Group.
Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said that the rise in optimism following the General Election was yet to fully show up in the data.
“The additional boost to approvals from the result of the general election still is to come,” he said. “All the evidence so far points to a further rise in demand.”
UK Finance’s data also showed that credit card spending rose 7.3 per cent to £11.8bn in December 2019 compared to the same month a year earlier.
“Repayments continue to offset spending, so that the level of borrowing on cards is currently growing at only 2.4 per cent annually, continuing the general slowdown from the recent high of 6.6 per cent in October 2016,” UK Finance said.