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London: Number of mortgages approved by lenders in Britain According to the Bank of India, it fell in October to its lowest since June 2020, shortly after the start of the COVID-19 pandemic. England Data on Tuesday that underscored a intensifying housing downturn.
Lenders approved 58,977 mortgages to buy homes last month, up from 65,967 in September. A Reuters poll of economists pointed to an approval rating of 60,200.
The UK housing market is showing clear signs of recession with various gauges of house prices following rapid growth during the pandemic.
A Reuters poll of economists and property market analysts last week showed house prices were forecast to fall by around 5% next year, having risen by around 24% since the start of 2020, according to official data.
Tuesday’s BoE data showed net growth in mortgage lending in October was lower than expected at 3.966 billion pounds ($4.75 billion), down from 5.878 billion pounds in September and the lowest reading since November 2021 .
Consumer lending increased net by £769 million in October, slightly higher than September’s increase of £608 million.
“October money and credit data show further signs that households are continuing to be cautious and that higher interest rates are starting to weigh on the economy,” said Ashley Webb, UK economist at consultancy Capital Economics.
Mortgage interest costs soared and many lenders temporarily stopped issuing loans after former prime minister Liz Truss’ unfunded package of tax cuts in September sparked a firestorm of asset sales by pension funds that forced the Bank of England The market was forced to freeze.
Although the truce reversed many of his tax cut measures and sacked his finance minister, Kwesi Kwarteng, this proved to do little to keep him in office and he was replaced as prime minister by Rishi Sunak.
The BoE said loans to businesses outside the financial sector – while a volatile data series – contracted by 7.348 billion pounds in net terms, the sharpest decline since mid-2020, when the first COVID lockdowns sent economic activity into freefall .
Some £5.579 billion of this decline included lending to large businesses. Barring the sharp move around the height of the COVID-19 pandemic, this was the biggest drop on record.
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