Britain’s housing market received a modest lift in June as mortgage approvals increased by more than analysts had expected, Bank of England figures showed today.
Annual lending growth to UK consumers slowed from 5.7 per cent in May to 5.5 per cent in June, however, the slowest rate since April 2014.
The number of people taking out mortgages increased by around 800 in June to 66,400 from 65,650 in May. This was the highest number since January and above economists’ expectations of 65,750.
Brexit uncertainty has weighed on house prices in 2019, particularly in London where official figures showed they dropped 4.4 per cent in May year on year, pleasing first-time buyers but upsetting homeowners.
“June’s mortgage data tie in with the view that housing market activity got some help from the avoidance of a disruptive Brexit at the end of March, but the overall benefit has been relatively limited,” said Howard Archer, chief economic advisor to the EY Item Club.
The closely-watched housing survey by the Royal Institution of Chartered Surveyors (Rics) for June showed a “very modest” rise in buyer demand.
Net lending to UK consumers rose by £1bn in June, higher than analysts’ expectations. Yet this was below June 2018’s £1.4bn figure, and annual consumer credit growth slowed to a 5-year low.
“The overall slowdown in consumer credit growth has clearly been significantly affected by markedly weaker private car sales as this has reduced demand for car finance,” said Archer.
Consumer spending has been a bright spot in the UK economy in 2019 as trade and business investment have suffered from political uncertainty. However, there are signs it is slowing.
A CBI survey showed retail sales fell at the fastest pace in over 10 years in June, due in part to the warm weather and football world cup a year earlier.