LONDON, June 2 British mortgage approvals fell more
than expected in April to their lowest level in nine months,
adding to signs that new rules on bank lending have taken some
of the heat out of the housing market.
The Bank of England said on Monday that mortgage approvals
numbered 62,918 in April, down from 66,563 in March, marking the
third consecutive monthly slowdown.
It was the lowest number of monthly approvals since July
last year, around the time when Britain's housing recovery was
starting to pick up speed.
Analysts had forecast a fall in approvals to 64,750 as the
new rules for banks offering mortgages left their mark.
The rules came into effect in late April, requiring lenders
to make more stringent checks on the ability of borrowers to
repay their loans. Several lenders were reported to have started
introducing them over the previous months.
BoE data also showed another fall in business lending,
despite attempts by the central bank to encourage banks to lend
more to companies which could aid the economic recovery.
Monthly mortgage approvals are still short of the 90,000
level seen before the 2008 financial crisis, but house prices
have risen rapidly amid a shortage of new home-building.
BoE Governor Mark Carney said last month that housing was
the biggest threat to Britain's economic recovery.
The Bank's Financial Policy Committee is expected to
announce later this month that it is taking further measures to
control mortgage lending.
As well as the tighter rules for mortgage lending, the BoE
has refocused its Funding for Lending Scheme away from mortgage
lending and dedicated it exclusively to business lending.
The BoE said that lending to non-financial businesses shrank
by 2.4 billion pounds in April, compared with a fall of 2.5
billion pounds in March. Lending to small businesses alone also
contracted, down 0.6 billion pounds.
Unsecured lending to consumers rose by 0.7 billion pounds, a
bit less than forecast in the Reuters poll and down from 1.0
billion in March.
The BoE's preferred gauge of money supply, M4 excluding
intermediate other financial corporations, rose 0.4 percent on
the month, leaving the annual growth rate at 3.8 percent.
(Reporting by William Schomberg and Ana Nicolaci da Costa)