UK Mortgage Approvals in June Exceed Analysts’ Expectations

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UK Mortgage Approvals in June Exceed Analysts’ ExpectationsMortgage approvals in the U.K. grew more than expected in June to the strongest level in four months, indicating that the housing market is slowly gaining momentum.

Mortgage approvals increased to 67,196 from May’s reading of 62,007, reported the Bank of England. Analysts surveyed by Bloomberg had expected a reading of 63,000. This was first time the approvals had increased since January after the government’s implementation of tougher mortgage lending rules slowed down uptake.

The BOE Governor Mark Carney also introduced additional measures in June to prevent the risk of the property market overheating by limiting the number of risky mortgages. The report indicated that mortgage lending stood at 2.1 billion pounds in June compared to May’s figure of 2.3 billion pounds. The net consumer credit fell to 418 million pounds.

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Prospective home buyers have been turned away by speculation the BOE may hike interest rates this year while housing prices soar, making homes more expensive. Last week, Hometrack Ltd reported that London housing prices remained static for the first time in two years. Most property surveyors also expect housing prices to decline over the next few months.

The BOE reported that loans to enterprises plunged 3.4 billion pounds in June from a month earlier. However, loans to small and medium enterprises rose 235 million pounds in June, though this is a 2.8 percent drop from last year.

The M4 gauge of money supply increased 0.1 percent in June from a month ago, and also declined 0.6 percent from a year ago.

The BOE also disclosed that global funds offloaded a net 4.2 billion pounds worth of gilts last month after buying a net 8.8 billion pounds in May. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com