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UK lenders approved 65,018 mortgages in October, slightly above expectations but lower than September, marking the weakest reading since May. Net mortgage lending fell to a little over GBP 4.27 billion from GBP 5.22 billion a month earlier, while remortgaging saw its steepest decline since February. Consumer borrowing increased by GBP 1.1 billion, below forecasts and slower than September's pace, though annual credit growth stayed at 7.2%. Despite uncertainty around recent fiscal measures and soft retail activity, the housing market has continued to move broadly in line with pre-pandemic levels.
Mortgage approvals in the UK saw a mild improvement against expectations in October, with lenders clearing 65,018 new home loans. This was slightly higher than the 64,200 approvals forecast by economists. However, the number remained lower than the 65,647 approvals recorded in the previous month, making it the slowest month since May. The movement comes at a time when buyers and lenders are adjusting to the tax changes outlined in the latest budget, which included higher levies on high-value homes. Advertisement
Net mortgage lending, which reflects completed property transactions, decreased to about GBP 4.27 billion from nearly GBP 5.22 billion in September. Remortgaging activity also softened, posting its sharpest monthly fall since February. This decline indicates that many borrowers are holding back from switching mortgage deals amid policy uncertainty and expectations around interest-rate movement.
Consumer borrowing continued but at a more moderate pace. Borrowing increased by GBP 1.1 billion, falling short of the projected GBP 1.35 billion and declining from the previous month's GBP 1.39 billion increase. Even with this slowdown, annual consumer credit growth held at 7.2%, matching the strongest level seen since the same period last year.
According to the Bank of England, overall mortgage approvals have been broadly stable since the summer and remain close to pre-pandemic trends. A market expert at Knight Frank Finance noted that many borrowers have been cautious because of tax-related announcements. However, the expert also indicated that expectations for a possible interest-rate cut in December may bring some relief for both new buyers and homeowners exploring refinancing options.
Source Reuters
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