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Home loans surge but British consumer remains subdued

MORTGAGE approvals soared to their highest levels in 18 months but credit card lending remained subdued as recession-hit consumers paid back their debts for the third successive month.<br /><br />Data from the Bank of England showed that a total of 56,215 mortgages were approved in September, up from 52,970 in August and above expectations, indicating that renewed confidence is attracting some prospective buyers back into the property market. <br /><br />Richard McGuire, senior fixed income strategist at RBC Capital Markets, said: &ldquo;While this data will further support the notion that UK housing is finding itself on more of an even keel, they continue to fall far short of the 75,000-80,000 range that has historically been consistent with flat house price inflation.&rdquo;<br /><br />But consumer credit fell by a net &pound;0.3bn for the third month in a row and below the six-month average&nbsp; because of many consumers&rsquo; desire to reduce their debt, low demand for credit and a lack of availability of unsecured credit from banks, said Howard Archer at IHS Global Insight.<br /><br />Other personal borrowing, like bank and car loans also fell.