UK mortgage approvals register first decline in four months

According to data published by the Bank of England, mortgage approvals for house purchases declined from 70,664 to 68,874 last month, compared with analysts’ expectations for a 72,500 reading.

Overall lending rose at its fastest rate since December 2008, boosted by strong growth in mortgage lending and consumer credit, the report added.

The former increased by £3.59bn in September, the largest net increase since April 2008, bringing its year-on-year growth to 2.2%, the biggest gain since January 2009.

Meanwhile, consumer credit grew more than expected last month, recording an 8.2% rise year-on-year, which represented its biggest increase in almost a decade.

“The dip in mortgage approvals in September could possibly reflect recent modestly reduced expectations of a near-term rise in interest rates,” said Howard Archer, chief UK and European economist IHS Global Insight.

“It may be that mortgage approvals had been lifted in recent months by a significant number of house buyers looking move quickly to try and lock in a low mortgage interest rate before they start rising.”