British mortgage approvals hit a six-month high in February, rising for a third straight month and suggesting the housing market could start to regain momentum, Bank of England data showed on Monday. Mortgage approvals for house purchases numbered 61,760 in February, up from 60,707 in January. Analysts in a Reuters poll had forecast 61,500 mortgage approvals were made in February. The number of approvals fell in most months last year when tighter rules on mortgage lending took effect, requiring banks and building societies to make more rigorous checks on whether borrowers can afford their loans.
Net mortgage lending, which lags approvals, rose by 1.74 billion pounds, the fastest growth in three months.
Recent surveys of housing market have shown a cooling in house price growth. Mortgage lender Nationwide last week said British house prices rose in March by the smallest annual amount since September 2013.
The BoE data pointed to further strong growth of lending to consumers as Britain’s economy continues to recover on the back of domestic demand. Consumer credit rose 6.6 percent year-on-year in February, down only slightly from January.
In the month of February alone, consumer credit grew by 740 million pounds, slowing a touch from January and below a forecast of 900 million pounds in a Reuters poll of economists.
Despite only weak rises in wages for much of the past five years, Britain’s economic recovery has become increasingly reliant on spending by households.
Lending to non-financial businesses rose for a second month by 440 million pounds, albeit down from growth of 1.79 billion pounds in January.