UK Mortgage Approvals At 1-Year Low
August 31 2021 - 3:28AM
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The UK mortgage approvals declined to one-year low in July
following the initial tapering off of the stamp duty holiday,
figures from the Bank of England showed on Tuesday.
Approvals for house purchases, an indicator of future borrowing,
decreased further in July to 75,152 from 80,272 in June. This was
the lowest since July 2020, but remained above pre-February 2020
levels. The expected level was 78,600.
Timely indicators suggest that demand will be resilient even
when the tax break ends altogether in October, although a lack of
stock for sale could constrain sales volumes, Andrew Wishart, an
economist at Capital Economics, said.
Individuals repaid GBP 1.36 billion of mortgage debt in July,
following a record borrowing of GBP 17.7 billion in June. Gross
lending fell to its lowest since June 2020, at GBP 16.5
billion.
Further, data showed that individuals borrowed no additional
consumer credit in July. The annual growth rate for all consumer
credit remained weak, decreasing slightly to -2.7 percent in July
from -2.2 percent in June.
Non-financial businesses borrowed GBP 3.7 billion from banks in
July, an increase from GBP 1.5 billion in June. The annual growth
rate of borrowing by all large businesses remained weak, at -3.1
percent.
The net repayment by SMEs of GBP 1.2 billion was the largest on
record, and follows average net borrowing of GBP 2.7 billion per
month since March 2020.
M4 money supply grew 0.1 percent on month in July and advanced 6
percent from the same period last year.
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