UK loan approvals for house purchase unexpectedly dropped in September for the first time in four months from its highest level in two-and-a-half years, figures from the Bank of England showed Thursday.
The number of loans approved for house purchase totaled 68,874 in September, which was lower than August’s 70,664, revised from 71,030. Economists had forecast 72,400 approvals. The August figure was the highest since January 2014.
Total secured lending to individuals grew GBP 3.6 billion, which was the biggest gain since April 2008. Economists had forecast GBP 3.3 billion growth.
Consumer credit grew GBP 1.3 billion, which was greater than the GBP 1.1 billion increase economists had forecast.
Samuel Tombs at Pantheon Macroeconomics said the drop in mortgage approvals was neither a shock nor the start of a trend. At the start of the week, data from the British Bankers’ Association revealed a decline in home loan approvals during September to a four-month low.
Meanwhile, Tombs said lenders’ intention to increase the supply of secured credit and strengthening wage growth point to an imminent revival.
“The big picture is that overall credit flows are improving, albeit slowly…But bank lending is unlikely to grow strongly enough to prevent the overall economic recovery slowing next year, particularly if it is mainly directed towards the housing market,” the economist added.
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