UK Mortgage Approvals Rise To 6-Month High

(RTTNews) - UK mortgage approvals increased to the highest in six months in July but secured lending decreased to a two month low, official data showed Monday.

Mortgage approvals for house purchases, an indicator of future borrowing, rose by 800 to 65,400 in July, the Bank of England said.

This was the highest total since January, when approvals hit 65,775. Approvals were forecast to drop to 64,000.

The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages decreased for the fifth straight month in July. The rate eased to 4.28 percent from 4.34 percent in June.

Secured lending decreased less-than-expected to GBP 4.5 billion in July from GBP 5.4 billion. Lending was seen at GBP 3.4 billion.

In July, consumer credit rose unexpectedly to GBP 1.6 billion from GBP 1.5 billion in the previous month, while it was expected to fall to GBP 1.35 billion. Annual growth in consumer credit accelerated to 7.0 percent from 6.8 percent in June.

Business borrowed GBP 5.0 billion of loans from banks and building societies compared with GBP 2.3 billion of net repayment in June.

Within this measure, large businesses borrowed GBP 4.3 billion in July, compared to GBP 2.5 billion of net repayment in the previous month.

Net borrowing from small and medium-sized non-financial businesses increased to GBP 0.7 billion in July, which was the highest since March 2021, compared to GBP 0.2 billion in June.

Data released by Nationwide Building Society earlier in the day showed that house price growth softened in August due to stretched affordability. House prices increased 2.1 percent on a yearly basis, slower than the 2.4 percent rise seen in July.