Mortgage market activity picks up, BoE figures show
Mortgage market activity picked up in March as households borrowed an extra £4.1bn secured on property, Bank of England figures showed.
The level of lending in March followed a quiet February when additional lending was £3.3bn.
But the number or mortgages approved for buying a house fell by about 3,000 in March to 62,300, suggesting continued caution amid economic and political uncertainty. Approvals for remortgaging rose slightly to 49,700 as homeowners snapped up low rates offered by banks and building societies.
Consumer credit increased by £0.5bn in March, the lowest increase since November 2013 and well below the £0.9bn average since July 2018. The BoE said the decline was mainly caused by reduced lending for car finance as drivers hold off on buying new cars.
Jonathan Harris, director at mortgage broker Anderson Harris, said: “With mortgage approvals falling, suggesting future mortgage lending will be subdued, clearly Brexit uncertainty is still having an impact on people’s decisions to buy and sell. People are being more cautious and holding off from spending on big ticket items, such as upgrading the car.”
The BoE released its figures on the same day a survey by Nationwide showed the UK property market remaining subdued with prices barely rising in April.
Andrew Montlake, a director at mortgage broker Coreco, said the BoE figures did not reflect a more recent increase in house purchases.
“While mortgages approved for house purchase dipped slightly in March, expect that figure to improve significantly in April as the past month has seen a sharp pick-up in activity levels,” Montlake said.
“Prices are under pressure and when you factor in the competitive mortgage rates available, people are increasingly parking their Brexit concerns and getting on with their lives.”