UK mortgage approvals slip in August, credit card borrowing rises
Housing market activity seems to be moderating just as demand for unsecured loans has begun to rise quite strongly, the latest data from the British Bankers Association (BBA) revealed.
Sustained growth in borrowing was to be seen in manufacturing, retail and wholesale in August, the banking lobby said. That was offset by a decline in borrowing in the real estate sector. Nevertheless, the former was boosted by short-term temporary loans and support for an acquisition, the BBA explained.
The number of mortgages for home purchase which were approved increased by 5% to 41,588, a 12-month low, versus 42,715 in July, while those for re-mortgaging were down 16% and those classed as “other” were off by 30%.
Economists had been expecting a reading of 42,900.
Net credit card borrowing increased by £200m, to £8.3bn, the same as last month.
David Dooks, Statistics Director at the BBA, said he was particularly struck by the strong rise in unsecured personal loans following several years of decline.
“The fact that mortgage approvals are currently continuing to soften after lenders have now likely got to grips with the new mortgage regulations suggest that there has been some underlying moderation in housing market activity,” wrote Dr.Howard Archer, chief UK +European economist at IHS Global Insight.