By Suban Abdulla LONDON (Reuters) -British homebuyers borrowed the most in new mortgages since September 2022 in January, while approvals for new lending dropped less than expected ahead of the end of
UK Mortgage Lending Sees Largest Increase Since September 2022
By Suban Abdulla
LONDON (Reuters) -British homebuyers borrowed the most in new mortgages since September 2022 in January, while approvals for new lending dropped less than expected ahead of the end of a tax break on property purchases, according to Bank of England data on Monday.
Net mortgage lending rose to 4.207 billion pounds ($5.31 billion) in January from 3.343 billion in December, the highest since September 2022 when the economic plans of former prime minister Liz Truss sparked turmoil in bond and mortgage markets.
January's lending was well above economists' expectations in a Reuters poll for 3.55 billion pounds of new lending.
Mortgage approvals for house purchase - a leading indicator for lending - dropped to 66,189 from 66,505 in December, a smaller decline than the fall to 65,650 expected in a poll.
The end this month of a temporary reduction in stamp duty land tax for first-time home buyers and for buyers of less expensive houses is likely to have boosted activity.
"Lower mortgage interest rates, rising real wages and a rush to beat changes to Stamp Duty in April supported net new mortgage approvals for house purchase in January," Rob Wood, chief UK economist at Pantheon Macroeconomics, said.
"But the rush to beat stamp duty changes seems to have peaked, so approvals will likely slow in the next few months."
Some measures of Britain's housing market, including house price data from mortgage lender Nationwide and the Royal Institution of Chartered Surveyors, have shown house prices picking up.
Other BoE data released at the same time chimed with official retail sales figures that had pointed to a pick-up in consumer demand in January against a subdued broader backdrop.
The BoE's data showed annual consumer credit growth slowed to 6.4% in January from 6.5% in December, the lowest since May 2022.
But consumer credit jumped in cash terms by a net 1.740 billion pounds in January from 1.062 billion pounds in December - the biggest increase in a year and above the Reuters poll consensus for a 1.2 billion pound rise.
($1 = 0.7928 pounds)
(Writing by Suban Abdulla; editing by David Milliken and Christina Fincher)
