UK mortgage approvals rose unexpectedly in June, while net lending saw little growth, indicating that recovery in the housing market is still struggling to gain momentum.
According to the Bank of England, mortgage lenders approved 48,421 home loan purchases, a record high since the 46,418 loans recorded in May 2010.
Economists predict 46,000, based on the median of 18 estimates in a survey by Bloomberg News. Approvals have been recorded at between 43,000 and 50,000 since 2010, against the average of 119,000 in 2006.
UK house-price figures have been mixed, with the Land Registry noting that its latest value remained unchanged in July, while Nationwide Building Society reported a 0.2 percent basis point increase.
GfK NOP Ltd said that consumer confidence fell this month due to the bleak economic outlook.
While the central bank kept this month’s interest rate at a record low, the National Association of Estate Agents noted that declining confidence and mortgage scarcity is affecting demand.
“There are still significant difficulties in getting a mortgage,” said Howard Archer, Economist at London’s IHS Global Insight.
“The main support for house prices will come from the fact that interest rates are likely to remain very low.”
Net mortgage lending dropped by £100 million (US$163 million) in June from May, while consumer credit rose by £400 million, said the central bank.
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