Financial News: UK Mortgage Approvals Fall To 32-Month Low

UK Mortgage Approvals Fall To 32-Month Low

(RTTNews) - UK mortgage approvals declined to a 32-month low in August amid higher borrowing costs, while consumer credit reached a record high, data from the Bank of England showed Tuesday.

Net mortgage approvals for house purchases, an indicator of future borrowing, fell unexpectedly to 54,918 in August from 55,928 in the previous month.

Approvals reached the lowest since December 2023, and remained below forecast of 56,000.

The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages increased to 4.60 percent in August from 4.45 percent in July.

Meanwhile, net borrowing of mortgage debt by individuals increased to GBP 4.4 billion in August from GBP 4.1 billion in July.

Data showed that net borrowing of consumer credit by individuals climbed to a record GBP 2.46 billion from GBP 2.1 billion in July.

Within this, net borrowing through credit cards was GBP 1.2 billion in August, up from GBP 0.9 billion in July. Net borrowing through other forms of consumer credit rose to GBP 1.3 billion, from GBP 1.2 billion.

Further, data showed that households' deposits with banks and building societies increased by GBP 4.7 billion compared to a GBP 3.8 billion deposits in July. Meanwhile, businesses borrowed a net GBP 4.1 billion of loans from banks and building societies, following GBP 1.9 billion of net borrowing in July.

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