LONDON (Reuters) - British lenders approved 66,526 mortgages in December, more than expected by economists, Bank of England data showed on Thursday. A Reuters poll of economists had pointed to 65,400
UK Mortgage Lending Increases to Highest Since 2022
LONDON (Reuters) -British lenders approved more mortgages than expected in December and net mortgage lending volumes rose by the most in more than two years, according to BOE-BANKS-e57d1808-2900-42bd-832f-d8f2baa8f262>Bank of England data that echoed other signs of demand in the housing market.
The BoE said on Thursday that lenders approved 66,526 new mortgages for house purchase last month, higher than a median forecast of 65,400 in a Reuters poll of economists and slightly from November's upwardly revised reading.
Secured lending jumped by a net 3.568 billion pounds ($4.44 billion), over a billion pounds more than November's increase and the biggest rise since September 2022, when then Prime Minister Liz Truss' "mini-budget" at the end of the month triggered bond market turmoil and a subsequent lending slowdown.
A report published two weeks ago by the Royal Institution of Chartered Surveyors showed house prices in December also rose at their fastest pace since September 2022 along with a continued increase in sales and new buyer enquiries.
The expiry at the end of March this year of temporary tax incentives for buyers of less expensive homes and first-time buyers is expected to bring forward some demand in the property market.
The prospect of interest rate cuts by the BoE in 2025 is also encouraging buyers.
The central bank's data showed a net increase of more than 1 billion pounds in consumer credit lending, the biggest increase in three months.
However, lending growth in the quarter as a whole slowed to its weakest since September 2021 at 5.2% on an annualised basis.
Karim Haji, global and UK head of financial services at KPMG, said the month-on-month rise in borrowing could be a sign of strain on household finances.
"It's no surprise to see borrowing rise in a particularly expensive month when the cost of living remains high," Haji said. "A colder than average December triggered greater demand for energy, adding to households' financial strain."
($1 = 0.8039 pounds)
(Writing by William Schomberg, editing by Andy Bruce and David Milliken)
