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UK mortgage approvals fall for the first time in six months in March

Bank of England data showed that British mortgage approvals fell for the first time in six months in March to a 3-month low. Mortgage approvals for house purchases fell to 71,357 in March, down from 73,195 in February. Analysts in a Reuters poll had forecast 74,500 mortgage approvals were made in March.

On the other hand, secured lending and consumer credit expanded strongly, the Bank of England reported Friday. Net mortgage lending, which lags approvals, rose by 7.435 billion pounds last month, the biggest increase since October 2007. Net consumer credit grew GBP 1.9 billion in March versus a GBP 1.4 billion rise in February and a GBP 1.3 billion rise forecast by economists.

A surcharge on the purchase of buy-to-let properties and second homes was scheduled to take effect from April 1 which spurred an increase in buying of such properties in recent months before March’s slowdown as the deadline approached.

BOE Deputy Governor Jon Cunliffe warned this week that housing and consumer credit are “hot spots” that the central bank is watching. He also said the Financial Policy Committee won’t hold back from quashing risks that appear in the property market.

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