UK mortgage approvals show first annual rise in 14 months, figures from UK Finance show
A decline in the number of mortgages approved by British high-street banks flattened out last month, with the first year-on-year rise since September 2017, figures from industry group UK Finance showed on Friday.
Britain’s housing market has slowed since the country voted to leave the European Union in June 2016, and other surveys this month have shown anxiety among consumers and businesses ahead of the planned departure on March 29.
Friday’s data showed British banks approved 39,403 mortgages for house purchase in November on a seasonally adjusted basis, down from 39,640 in October but up by 0.2 percent from November 2017 — the first annual rise in 14 months.
Chief economist at consultants EY ITEM Club, Howard Archer said the housing market is struggling for momentum in the face of still relatively limited consumer purchasing power, fragile consumer confidence and, possibly, wariness over higher interest rates.
Many economists expect house prices to be flat or marginally higher next year, as weakness in London and surrounding areas weighs on faster price growth in other parts of Britain, though the Bank of England has said falls of as much as a third are possible if Brexit descends into chaos.
Prime Minister Theresa May’s minority government plans to seek parliamentary approval for her Brexit deal in the week starting Jan. 14, after scrapping a vote before Christmas due to opposition from lawmakers of all parties.
Without a deal, Britain faces major economic disruption from the reintroduction of tariffs and customs checks at its borders.
UK Finance said credit card lending picked up slightly last month, though this mostly reflected a shift in preferred payment means rather than higher borrowing, with credit cards offering better consumer protection for purchases such as holiday travel.
Net lending to non-financial businesses fell by the most since May, dropping by 656 million pounds ($829 million).
UK Finance’s managing director for commercial finance, Stephen Pegge said overall lending to businesses has remained subdued in this period of economic uncertainty.
The Bank of England will publish November mortgage and consumer credit data from a wider range of lenders on Jan. 4.