30 October 2006, 13:08  UK Sept mortgage approvals biggest since Feb 2004

UK September mortgage approvals hit their highest in over two-and-a-half years, while mortgage lending growth stayed steady, figures from the Bank of England showed. The figures suggest that the UK housing market remains surprisingly buoyant, further suggesting that the Bank of England will raise interest rates by a further quarter point this month. The number of approvals for house purchases -- often seen as a good indicator of future demand in the property sector -- jumped to 126,000 from 120,000 in August, the highest figures since since February 2004. The figure is well above market expectations for a slight dip to 117,000. The value of approvals for house purchases rose to 16.9 bln stg from 16.3 bln in August. The total value of mortgage approvals, which also includes remortgaging, was 30.3 bln stg in September, up from 29.5 bln stg in August. The central bank also said net mortgage lending rose by 8.9 bln stg in September, against 8.8 bln stg in August. The latest figure is marginally below predictions for a 9.0 bln increase and the 9.0 bln stg average over the past six months, but remains at an elevated level. Meanwhile, the data continued to show a strong trend in secured lending contrasting with ongoing weakness in unsecured borrowing via credit cards, loans and overdrafts, though the latter was above expectations. Net consumer credit rose 0.9 bln stg over the month, up from 0.8 bln the previous month and against analysts' expectations for a rise of 0.7 bln stg.

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