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UPDATE 1-UK mortgage approvals fall to 4-month low in March - BBA
April 25, 2014 / 9:31 AM / 3 years ago

UPDATE 1-UK mortgage approvals fall to 4-month low in March - BBA

LONDON, April 25 (Reuters) - Britain’s banks approved the lowest number of mortgages since November last month ahead of the imposition of tougher credit checks, though numbers are still up very strongly from a year ago, industry data showed on Friday.

The British Bankers’ Association said its members approved 45,933 mortgages in March, down from 47,196 in February though more than 40 percent up on March 2013. BBA data does not include lending by major mutually owned lenders such as Nationwide.

Tighter rules on mortgage lending take effect on Saturday, Banks will have to check more closely that borrowers will be able to afford loan repayments when interest rates go up. Some lenders have already started to apply the changes.

Economists polled by Reuters last month on average expected interest rates to rise from their record low of 0.5 percent in the second quarter of next year, though since then financial markets have priced in a move as soon as March 2015.

The BBA also said that lending for overdrafts and personal loans had grown for the first time since January 2009 and was up 0.5 percent on the year.

“Consumer confidence is clearly picking up as more people seek to borrow from their bank to fund new purchases,” said BBA chief economist Richard Woolhouse.

However lending to businesses was still down, dropping by 4.4 percent on the year, the steepest decline since November. Business lending has been falling continuously since July 2009.

BBA data is usually a good leading indicator for trends in the Bank of England’s monthly lending statistics, which are due on May 1.

* For a table of the BBA data, see (Reporting by David Milliken; Editing by Alison Williams)

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