UK mortgage approvals are on the rise

 
City A.M. Reporter
BRITISH mortgage approvals edged up more than expected to their highest in nearly two years last month, but the overall picture for lending remained well below pre-crisis levels and the outlook appears set to darken.

The Bank of England said approvals for home loans – a gauge of house prices in six months’ time – numbered 52,743 in October, up from 51,193 in September.

This was the highest since December 2009, and above economists’ forecasts of a reading of 51,500, but well below the long run average before the financial crisis of around 90,000.

“The number of approvals remained well below the average of 90,000 seen in the lead up to the financial crisis, but today’s data nevertheless suggest that the outlook for the housing market is one of at least stable prices as we move into the new year, though downside risks clearly persist,” said Chris Williamson, chief economist at Markit.

Mortgage lending rose by the biggest amount since January 2011 at £1.28bn, but net unsecured consumer credit was weak on the month, edging up just £49bn, the smallest increase since the start of the year.

Bank figures showed the biggest annual fall in M4 broad money supply since monthly records began in 1983.

The Bank’s preferred measure, M4 excluding intermediate other financial companies, showed a small annual rise of 2.8 per cent.

Britain’s consumers have been reluctant to take on more credit for major purchases as bank lending conditions are relatively tight and uncertainty over jobs is weighing on sentiment.

BoE figures showed that net credit card borrowing was subdued at just £93m in October.