LONDON May 1 British mortgage approvals fell more
than expected for the second month in a row in March, Bank of
England data showed on Thursday, suggesting the introduction of
stricter lending rules was affecting the market.
The BoE said mortgage approvals for house purchases numbered
67,135, their lowest since September last year and down from
69,592 in February. Mortgage approvals in January were the
highest since late 2007.
Analysts in a Reuters poll had forecast 71,050 mortgage
approvals were made in March.
Tighter rules on mortgage lending took effect last weekend,
requiring more rigorous checks on whether borrowers can afford
their loans. Some lenders began applying the changes earlier.
Before the 2008 financial crisis, monthly mortgage approvals
ran at around 90,000, but the number of home sales has slumped
since then and is only slowly starting to recover.
Net mortgage lending, which lags approvals, rose by 1.8
billion pounds, above expectations and its biggest increase
since January 2012.
Consumer lending was also up strongly, increasing by 1.1
billion pounds, its biggest increase since September 2012.
Mortgage lender Nationwide said earlier on Thursday that
house prices rose faster than expected in April to record their
biggest annual rise since the start of the financial crisis, up
BoE Governor Mark Carney has played down suggestions that
the housing market is overheating.
But earlier this week, the Bank announced tough new tests
for banks which will have to show they could withstand a near 35
percent slump in house prices and a spike in interest rates.
The Bank refocused its Funding for Lending Scheme away from
mortgage lending and dedicated it exclusively to helping
business lending at the start of this year.
However, Thursday's data showed lending to non-financial
businesses fell by 2.3 billion pounds in March, after a fall of
631 million pounds in February. Lending to small businesses
alone fell by 1.1 billion pounds.
The BoE's preferred gauge of money supply, M4 excluding
intermediate other financial corporations, fell 0.1 percent in
the month, its biggest decline since April 2011, slowing the
annual growth rate to 3.7 percent.
(Reporting by William Schomberg and Belinda Goldsmith)