UK sees mortgage approvals dip in December
UK sees mortgage approvals dip in December
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By Tom Powell. |  |
Monday, 01, Feb 2010 11:33
By Sarah Garrod
The UK has seen a slight dip in the number of mortgages approved for home purchase during December.
But unsecured consumer credit rose for the first time in six months, driven by credit card borrowing.
Mortgage approvals for December stood at 59,023 according to Bank of England figures- down from 60,045 in November- but above the average of 55,004 seen over the past six months.
The Bank said that total net lending secured on dwellings increased by £1.2 billion, but this was below the revised November increase of £1.6 billion, but above the previous six-month average of £0.9 billion.
Consumer credit increased by £0.1 billion, above the previous six-month average of a net repayment of £0.3 billion, and the first increase since June 2009. Credit card lending increased by £0.2 billion but other loans and advances fell by £0.1 billion.
The Building Society Association (BSA) said today gross mortgage lending by building societies was £1.8 billion in December, compared to £1.6 billion in November, an increase of 15 per cent.
Paul Broadhead, BSA head of mortgage policy, said: "Whilst it is encouraging to see an increase in gross lending at the end of the year when activity would typically decline, we believe it is likely that this rise can be attributed to a rush from buyers keen to complete transactions before the year end in order to beat the removal of the stamp duty holiday.
"Despite this rise, total gross lending in 2009 was only half of that in 2008 and it is likely to remain at low levels until funding conditions improve."
Howard Archer chief UK and European economist at Global Insight commented on today's Bank of England figures: "The dip in mortgage approvals in December was somewhat surprising given that housing market activity could have been lifted to a limited extent at the end of 2009 by buyers looking to beat the price threshold for stamp duty on house purchases moving back down to £125,000 in January.
"The dip in mortgage approvals in December reinforces our suspicion that housing prices are likely to suffer a limited relapse during the coming months, and will be essentially only flat over the year as a whole."