Mar 29, 2023
UK Housing Market Shows Signs of Stabilizing as Approvals Rise
(Bloomberg) -- UK mortgage approvals rose more than forecast in February, adding to signs that the housing market is starting to stabilize following the blow inflicted by the autumn’s market turmoil.
Lenders authorized 43,500 home loans compared with 39,600 in January, the Bank of England said. It was the first increase since August and more than the 41,300 predicted by economists.
The figures suggest improving consumer confidence, resilience in the labor market and an easing of the cost-of-living crisis are feeding into the housing market. Earlier this month, mortgage lender Halifax reported a second consecutive increase in house prices.
The housing market has been hit by rising borrowing costs and economic uncertainty, and analysts still expect values to fall on balance this year.
In January, approvals fell to their lowest level since early 2009, except for the first Covid lockdown when the property market was shut. Last month, the value of mortgages advanced was just 700 million pounds, the lowest since 2016 excluding the pandemic. That reflected the weakness of property demand in recent months.
The effective rate of new mortgage rose 36 basis points to 4.24% in February.
Separate figures showed consumers borrowed an extra £1.4 billion ($1.7 billion) of unsecured credit during the month, more than forecast.
This was split between £600 million of borrowing on credit cards and £800 million of borrowing through other forms of consumer credit, such as personal loans and vehicle finance.
Households deposited an additional £1.6 billion with banks and building societies in February. Net flows of £6.8 billion into time deposits was largely offset by net withdrawals from sight deposits.
Non-financial companies repaid £4.5 billion of bank loans in February.
©2023 Bloomberg L.P.