LONDON, July 29 British mortgage approvals picked up
in June and were stronger than expected after falling for the
previous four months while banks introduced more stringent
checks on borrowers.
The Bank of England said on Tuesday that mortgage approvals
numbered 67,196 last month, up from 62,007 in May.
Analysts had forecast a smaller rise in approvals to 62,600.
Monthly mortgage approvals are still short of the 90,000
level seen before the 2008 financial crisis, and below a recent
peak of just over 76,000 in January.
But house prices have risen rapidly in recent months amid a
shortage of new home-building.
BoE Governor Mark Carney has said that housing is the
biggest domestic threat to Britain's economic recovery given the
risks of borrowers taking on too much debt. He says controls on
bank lending will be the first line of defence against a housing
bubble, rather than an increase in interest rates.
The BoE said on Tuesday that mortgage lending in June rose
by 2.1 billion pounds, easing off a bit from May and a touch
higher than the forecast in the Reuters poll.
As well as the more exhaustive checks that banks are
required to make on people seeking a mortgage which came into
effect in April, the BoE announced in June that it was taking
measures to prevent a build-up of risky debt.
The BoE has been seeking to cool the mortgage market since
January when it refocused its Funding for Lending Scheme away
from mortgage lending and dedicated it exclusively to business
The BoE said lending to non-financial businesses slumped by
3.4 billion pounds in June, its biggest fall since November last
year, compared with an increase of 2.3 billion pounds in May.
Lending to small businesses alone edged up by 235 million
Unsecured lending to consumers rose by 418 million pounds,
about half the increase forecast in the Reuters poll and the
lowest increase since January 2013.
The BoE's preferred gauge of money supply, M4 excluding
intermediate other financial corporations, rose 0.5 percent on
the month, taking the annual growth rate to 3.9 percent.
(Reporting by William Schomberg and Tess Little)