Mortgage approvals have exceeded last month’s predictions, rising to their highest level since December 2009, according to figures from the Bank of England.
Good and bad
The data also shows, however, that credit growth continues to be much weaker than it was before the financial crisis, and will not be a major talking point in the debate on loosening monetary policy.
Still, the Bank of England reports that mortgage approvals hit 52,410 in August, rising thousands from 49,644 in July.
Analysts had predicted a small dip for August, at 49,500 approvals.
These are the most favorable figures since December 2009, when the housing market experienced a burst in momentum and picked up from the height of the financial crisis.
The number of approvals, however, is only half the number from before the crisis.
Further data from mortgage lender Nationwide, released on Thursday, showed that house prices are standing still.
Bank data also showed that consumer credit rose by 0.5 billion pounds in August.
This data supports the slow recovery, as there were was a 0.3 billion pound expansions in July and June. July’s expansion rose even more than the forecasted 0.2 billion pounds.
However, mortgage lending slowed somewhat, coming in below forecasts at 0.6 billion pounds compared to July’s figures of a 0.7 billion pound rise.
While UK consumers are beginning to gain consumer confidence in retail sales, it seems they are continuing in their reluctance to take credit for major purchases, such as getting on the property ladder. This may be due to bank lending conditions, which are currently tight, though employment uncertainty is sure to impact the numbers.
Other financial figures released at the same time as the Bank of England’s showed a slow in growth of the BoE’s favoured measure, M4 excluding intermediate other financial corporations. This month showed no growth on the measure, and annual growth shows a fall to 2.2% in August from July’s 2.3%.