U.K. mortgage approvals rose more than economists forecast in June in a sign of continued momentum in the housing market. Lending to businesses fell the most on record.<\/p>\n
Home-loan approvals climbed to 66,582 from an upwardly revised 64,826 in May, the Bank of England said in London on Wednesday. Economists had forecast a figure of 66,000, according to a Bloomberg survey.<\/p>\n
The figures chime with recent surveys showing renewed strength in the housing market following the May general election as employment prospects improve, wages increase and households take advantage of record-low mortgage rates. By contrast, lending to non-financial businesses fell by 5.5 billion pounds ($8.6 billion) last month, the biggest drop since records began in May 2011, the BOE said.<\/p>\n
The pound showed little reaction to the figures and was trading at $1.5612 as of 9:32 a.m. London time, unchanged from Tuesday.<\/p>\n
The BOE report also showed that net mortgage lending — gross loans less repayments — was 2.6 billion pounds in June, the most since July 2008. Net consumer credit totaled 1.2 billion pounds.<\/p>\n
Cheap borrowing costs are stoking housing demand and helping put upward pressure on prices. The effective interest rate on new mortgages fell 3 basis points to 2.56 percent. The rate on outstanding secured loans declined 2 basis points to 3.09 percent. Both were the lowest on record.<\/p>\n
BOE Governor Mark Carney said last month he\u2019s maintaining measures introduced a year ago aimed at restricting riskier mortgage borrowing because of the momentum in the housing market. The so-called buy-to-let market is in the spotlight at the central bank, with officials reviewing the sector and potential threats to financial stability from the sector.<\/p>\n
The BOE said there was no anecdotal evidence to explain the drop in business lending last month. Within the total, loans to small and medium-sized enterprises rose 353 million pounds.<\/p>\n
M4, a broad measure of money supply, fell 0.5 percent from the previous month and was 0.3 percent lower than a year earlier. An underlying measure of M4 — excluding so-called intermediate and other financial corporations — increased 3.8 percent on a three-month annualized basis.<\/p>\n
Non-residents sold a net 4.3 billion pounds of gilts in June. It followed net purchases of 8.5 billion pounds in May.<\/p>\n","protected":false},"excerpt":{"rendered":"
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