Surge in UK mortgage approvals during April
UK mortgage approvals jumped by the most in more than six years in April, the Bank of England said yesterday, the latest sign of a bounce-back in the country's housing market.
The BoE figures also showed growth in lending to consumers remained strong, underscoring the lop-sided nature of Britain's economic recovery.
Mortgage approvals for house purchases numbered 68,076 in April, hitting their highest level in 14 months and up strongly from 61,945 in March.
The BoE said the monthly increase was the biggest since February 2009.
Analysts in a Reuters poll had forecast 63,000 mortgage approvals were made in April.
The number of approvals fell throughout most of 2014 as regulators introduced new controls on mortgage lending, cooling house price growth and easing concerns about a bubble in the housing market.
But there have been signs that the housing market is heating up again. Mortgage approvals have risen in four of the last five months and the pace of price rises has picked up.
Net mortgage lending, which lags approvals, rose by a less than expected £1.735bn in April, the BoE said, slowing from March.
The BoE said consumer credit grew by £1.173bn (€2.4bn) in April. Economists had expected an increase of £1bn after consumer lending jumped by nearly £1.3bn in March, its biggest increase since February 2008.
Despite only weak rises in wages for much of the past five years, the UK recovery has relied largely on household spending.
The figures were a reminder of the lopsidedness of Britain's recovery, with weak manufacturing and trade unlikely to contribute much to growth in the coming months.
Scotiabank economist Alan Clarke said they could also help to persuade some BoE policymakers to think about raising interest rates from their record low of 0.5pc. "I think the hawks should start to get twitchy imminently. You've got wages picking up just as (the BoE) pushed down its wage forecast, and there's a good chance of a very good Q2 GDP," he said.
Sterling rose against the dollar after the data.
A separate survey from Markit/CIPS showed growth among housebuilders picked up last month -- something that will be crucial to ensuring housing supply meets demand and keeping rising prices in check.
Mortgage approvals fell throughout most of 2014 as regulators introduced new controls on mortgage lending, cooling strong house price growth.
BoE Governor Mark Carney has described the housing market as the biggest medium-term risk to UK financial stability.