Home-buyer mortgage approvals at five-month high in June
The number of mortgage approvals being made to home-buyers jumped to a five-month high in June, Bank of England figures show.
But annual growth in consumer credit, which includes borrowing using credit cards, overdrafts and personal loans, slowed to its weakest level for more than five years.
Some 66,440 mortgages were approved for house purchase in June – the highest total since January, the Bank’s Money and Credit report showed.
Meanwhile, consumer credit increased by 5.5% annually in June, down from 5.7% in May, marking the weakest 12-month growth since April 2014.
The Bank said annual growth in consumer credit has fallen steadily since a peak in late 2016.
Howard Archer, chief economic adviser at EY Item Club, said: “Despite being at a five-month high of 66,440 in June, mortgage approvals were well in the 63,000 to 68,000 range that has broadly held since late 2016.
“They were also not that far above the average of 65,267 seen over the first half of 2019.
“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.
“Improved consumer purchasing power and robust employment growth has also recently been helpful for the housing market but latest developments have been somewhat mixed, with employment growth in particular showing signs of slowing.”
Commenting on the consumer credit figures, Mr Archer said households “have seemingly become relatively careful in their borrowing amid concerns over the economic outlook”.
He continued: “It is also evident that consumer credit growth has recently been limited by markedly weaker private car sales as this has reduced demand for car finance.
“Meanwhile, lenders have become more careful about advancing unsecured credit – the second quarter of 2019 saw lenders further reduce the amount of unsecured credit available to households and again tighten lending standards.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Monetary indicators provide reassurance that the economy isn’t grinding to a halt ahead of the October Brexit deadline.”