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U.K. Mortgage Approvals Rise to 46,967, More Than Forecast
U.K. mortgage approvals rose to 46,967 in February, the highest level since November and more than economists forecast, suggesting the property market is stabilizing.
The figure compares with an upwardly revised 46,152 in January, the Bank of England said today in London. Economists forecast 46,000, based on the median forecast of 15 economists in Bloomberg News survey.
Recent house-price data have been mixed as a lack of supply props up home values, while banks’ rationing of credit and record low consumer confidence curb demand. The property market may come under pressure as government spending cuts begin in earnest and accelerating inflation stokes expectations the Bank of England will raise interest rates by mid-year.
“Following a weak end to the year, mortgage approvals appear to have picked up a little bit recently,” Philip Shaw, an economist at Investec Securities Ltd. in London, said before the release. “Approval levels are still far from a level indicative of a housing market recovery and well off the pre- crisis 2006 high of 128,000.”
Separate figures showed the economy shrank 0.5 percent in the fourth quarter, less than previously estimated, as services and factory output was revised higher. Excluding the impact of the coldest December in a century, growth was “broadly flat,” the Office for National Statistics said today in London.
First-Time Buyers
The pound dropped as much as 0.1 percent after the reports and was trading at $1.6017 as of 9:35 a.m. in London, up 0.2 percent on the day.
Chancellor of the Exchequer George Osborne said in his budget last week that the government will help 10,000 first-time buyers get interest-free loans of 20 percent of the value of the property. Developers have said that sales have suffered because first-time buyers can’t afford high deposits for new homes.
Today’s Bank of England figures show net mortgage lending was 1.2 billion pounds ($1.9 billion) in February and gross lending was 11.9 billion pounds. Consumer credit rose 768 million pounds, with borrowing on credit cards rising 96 million pounds.
A measure of M4 money-supply growth that the central bank uses to assess the effectiveness of its asset purchases slowed to 0.5 percent in the three months through February on an annualized basis from 3.2 percent in January. The gauge excludes financial companies that specialize in intermediating between banks, such as holding companies and non-bank credit grantors.
Total M4 fell 0.3 percent on the month and was down 1.5 percent on the year.
To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
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