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.
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.
Richard McGuire, senior fixed income strategist at RBC Capital Markets, said: “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.”
But consumer credit fell by a net £0.3bn for the third month in a row and below the six-month average because of many consumers’ 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.
Other personal borrowing, like bank and car loans also fell.