UK mortgage lending jumped to the highest level in eight months in May, and approvals held up better than expected, suggesting the housing market is continuing to defy headwinds from a surge in the cost of living.
Lending jumped to £7.4 billion ($9 billion) in May, the Bank of England said Friday, the highest since September. Banks approved 66,200 home loans, slightly higher than in April and above economists’ estimates for a decline to 64,000.
The figures conflicted with reports from Nationwide Building Society and the online property site Zoopla suggesting some of the heat may be coming out of the housing market as higher interest rates increase the cost of borrowing.
The BOE report showed property demand remained firm through May. That’s despite an increase in the effective interest rate on new mortgages, which rose 13 basis points in May to 1.95%, highest level since June 2021.
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