U.K. Mortgage Approvals Decline, Consumers Rein In Borrowing

(Bloomberg) -- U.K. mortgage lending unexpectedly fell in March and unsecured credit grew at its weakest pace in more than five years.

The Bank of England figures paint a picture of consumer caution as uncertainty over Britain’s departure from the European Union continues.

Lenders approved 62,341 home loans, the fewest since the end of 2017 and down almost 5 percent from February, the BOE said. Consumer credit grew just 549 million pounds ($717 million), less than half the pace of the previous two months and the smallest increase since November 2013.

The BOE said credit was weak because of a fall in new lending for car finance and more subdued borrowing on credit cards. The annual growth rate slowed to 6.4 percent, the least since October 2014 and down from rates above 10 percent in 2017.

The figures follow a Nationwide Building Society report showing the housing market remained subdued in April, with prices rising by less than 1 percent on an annual basis for the fifth consecutive month.

Mortgage approvals remain well below the 70,000 applications a month posted in the year leading up to the 2016 Brexit referendum.

Lending to non-financial business fell by 683 million pounds in March. Non-resident investors bought a net 9.4 billion pounds of U.K. government bonds following sales of 8.3 billion pounds in February.

To contact the reporter on this story: Zoe Schneeweiss in London at zschneeweiss@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Andrew Atkinson

©2019 Bloomberg L.P.