UK's banks lending fewer mortgages
London, May 28, 2014
Britain's banks last month approved the lowest number of mortgages since August 2013 in the latest sign that the housing market is losing some momentum, although prices remain strong.
Economic recovery and record low interest rates have driven British house prices up by about 10 per cent over the past year, raising concern some buyers might be taking on too much debt.
The British Bankers' Association said its members approved 42,173 mortgages in April, falling for a third straight month and down from 45,045 in March.
New tighter rules on mortgage lending are widely believed to have dampened borrowing in recent months.
Mortgage lending was up 24.5 per cent compared with April last year, slowing sharply from previous months.
However, net mortgage lending was at its highest in nearly three years and the average value of mortgages was near a record high, suggesting the rate of price growth could still become a problem.
The Bank of England (BoE) is expected to announce further mortgage controls, possibly as soon as the June meeting of its Financial Policy Committee which was set up to help avert recklessness in the financial system.
BoE officials have become more vocal about their concerns with the housing market in recent weeks, especially the risk of households taking on too much debt.
The BoE is due to publish its own mortgage lending data for April on June 2, after two consecutive months of falling mortgage approvals.
The average value of loans for house purchases rose to £164,500 ($277,100) in April - its highest since 166,600 in June 2012, which was a record high.
Last week, British bank Lloyd's said it would limit mortgages to a maximum of four times a borrower's annual earnings when it is lending more than £500,000 on a property. Net mortgage lending reached £1.08 billion in April - its highest since August 2011 and up from £1 billion in March.-Reuters