U.K. Mortgage Approvals Fall to 61,341 in March

Updated on

U.K. mortgage approvals unexpectedly fell in March in a sign consumers were wary of purchasing a new home in the months before the general election.

Approvals fell to 61,341 from 61,523 in February, the Bank of England said Friday. Economists had forecast an increase to 62,500. A separate report showed overseas investors bought a net 14.8 billion pounds ($22.5 billion) of gilts in March.

With less than a week until the general election, prospective British house buyers are holding back. Voter opinion polls show no major party will win an outright majority, leaving unclear whether Prime Minister David Cameron’s Conservatives or Ed Miliband’s Labour Party will take office. Labour has pledged to increase taxes on the most expensive homes.

The pound was lower against the dollar after the data were published, and traded at $1.5337 at 9:32 a.m. London time.

Net mortgage lending was unchanged at 1.8 billion pounds, while consumer credit rose to 1.2 billion pounds. The effective interest rate on new mortgages fell 10 basis points in March to 2.68 percent. The rate on outstanding secured loans fell 1 basis point to 3.14 percent.

Loans to non-financial businesses rose 2.7 billion pounds in March from February, down an annual 0.5 percent. Lending to small and medium-sized enterprises rose 0.3 billion pounds, and declined 1 percent on the year.

M4, a broad measure of money supply, rose 0.3 percent and was down 0.6 percent down from a year earlier. An underlying measure of M4 -- excluding so-called intermediate and other financial corporations -- rose an annualized 2.5 percent.

The March activity of overseas investors followed 5.8 billion pounds of gilt purchases in February. Over the whole quarter, a net 14.6 billion pounds was bought.

NI UK NI ECO NI UKECO NI MOR NI REL NI HSNG NI BON NI GLT NI FRX

(Bank of England corrects data on gilt purchases in second and last paragraphs of story published May 1.)
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