UK Mortgage Approvals Fall In October

(RTTNews) - UK mortgage approvals decreased in October as demand for mortgages to buy houses weakened ahead of the budget announcement, data from the Bank of England showed Monday.

Net mortgage approvals for house purchases, an indicator of future borrowing, fell by 600 to 65,000 in October. However, this was well above economists' forecast of 64,000.

The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages was 4.17 percent in October compared to 4.19 percent in September. This was the lowest since January 2023.

In November, the BoE had maintained the bank rate 4.00 percent, which is the lowest since early 2023. The BoE had reduced the key interest rate five times since August 2024.

Mortgage debt by individuals dropped to GBP 4.3 billion after rising to GBP 5.2 billion in September. Similarly, gross lending dropped to GBP 24.5 billion from GBP 24.8 billion, data showed.

Consumer credit by individuals declined for the second straight month. Consumer credit fell to GBP 1.1 billion from GBP 1.4 billion in September. Nonetheless, consumer credit logged a steady annual growth of 7.2 percent in October.

UK businesses repaid a net GBP 1.1 billion of loans in October compared to a net repayment of GBP 0.3 billion in September.