Mortgage approvals for house purchases fall to 53,400 as remortgaging jumps
Bank of England figures for September show the rate on new mortgages edging up to 4.63% and households putting £5bn into ISAs.
By Daily Oracles News Team1 min read
Fewer mortgages were approved for house purchases in September, while the number of borrowers moving their loan to a new lender rose sharply, according to Bank of England data published on Thursday.
Approvals for house purchases, net of cancellations, came to 53,400, down from 54,800 in August and below the average of around 58,800 over the previous six months. The Bank describes approvals as an indicator of future borrowing.
Remortgaging approvals moved the other way, to 42,600 from 34,000. That count only includes borrowers switching to a different lender.
Borrowing costs
The effective interest rate on newly drawn mortgages, meaning the rate borrowers actually pay, rose to 4.63% from 4.60%. Across all outstanding mortgages it reached 4.03%, up from 4.00%.
Net mortgage borrowing slowed to £3.9bn, from £4.2bn in August and a six-month average of £4.9bn. Annual growth in mortgage lending eased to 3.4%.
On unsecured debt, net consumer credit borrowing dropped to £1.9bn from £2.7bn, with credit cards accounting for £0.7bn. The effective rate on interest-charging overdrafts jumped by 52 basis points to 20.79%. Credit card rates rose to 21.71%, while the rate on new personal loans dipped to 9.85%.
Savers and businesses
Households added £4.7bn to their bank and building society deposits. They put £5.0bn into ISAs, while withdrawing £2.9bn from accounts that pay no interest. New fixed-term deposits earned an average of 4.42%, up from 4.24% in August.
Companies borrowed more from banks. Non-financial businesses took out a net £9.3bn of bank loans, up from £4.7bn, with large firms accounting for £8.2bn and small and medium-sized firms £1.0bn. The average rate on new loans to small and medium-sized firms fell to 6.55%.
The next Money and Credit release is due on 30 November.
