UK mortgage approvals hit highest level since February 2017

UK mortgage approvals rose to their highest level in April since February 2017, according to data released by UK Finance on Tuesday.

Mortgage approvals increased to 42,989 from 40,564 in March, coming in well above consensus expectations for 39,500.

Meanwhile, consumer lending pushed up 3.8% on the year in April, slowing down a touch from March's 4.1% growth.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the mortgage approvals figures provide more evidence that households have not been fazed by the fraught political situation.

"Granted, the UK Finance measure only relates to loans by seven high street banking groups accounting for two-thirds of the overall market. The official measure of approvals fell to a 15-month low in March, despite a marginal rise in the UK Finance measure. In addition, the new buyer enquiries balance of the RICS Residential Market Survey still points to rapidly falling demand.

"Nonetheless, we doubt that the main banks are gaining market share so rapidly that the UK Finance data are completely misleading about overall market trends, while the RICS survey has cried wolf for several months now."

Gareth Lewis, commercial director of property lender MT Finance, said: "These figures are as good as we could expect, given the ongoing political uncertainty. House purchases are up, which is encouraging because it means people are still going ahead and buying property even though you might expect them to hold fire because of the political outlook. People are still willing to spend money on what is their biggest purchase, which is not a decision that is taken lightly.

"It is also encouraging that people are using their credit cards sensibly - paying off as much as they are spending at the end of the month. This means credit card debt isn’t spiralling out of control while interest rates are low, which bodes well once they rise, as people are not spending what they can’t afford."