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The UK housing market slowed in January, as mortgage approvals fell to 59,999, the lowest since January 2024, defying economists expectations of a rise. Mortgage lending values also rose at a slower pace, with a net increase of 4.076 billion pounds (USD 5.5 billion), slightly below December's growth. At the same time, net consumer borrowing rose by 1.8 billion pounds, exceeding forecasts. The figures indicate that while house purchases are slowing, consumer credit continues to expand, highlighting ongoing borrowing activity despite affordability pressures and higher interest rates in the housing sector.
The UK housing market experienced a noticeable slowdown in January, with mortgage approvals dropping to their lowest level in two years, according to Bank of England data released earlier this week. Lenders approved 59,999 mortgages for house purchases, down from 61,007 in December, defying expectations of a rise to 62,000 predicted in a Reuters poll of economists. This marked the lowest number of approvals since January 2024. Advertisement
The value of mortgage lending, which typically trails the approval figures, also showed minimal growth. In January, net mortgage lending increased by 4.076 billion pounds (USD 5.5 billion), slightly lower than December's nearly 4.5 billion-pound rise. Meanwhile, consumer credit expanded at a faster pace than anticipated, with net borrowing rising by 1.8 billion pounds, exceeding the 1.7 billion-pound forecast.
Analysts say the dip in mortgage approvals highlights ongoing pressures in the housing market, driven by higher interest rates and affordability concerns for buyers. Despite this, consumer borrowing outside mortgages continues to grow, reflecting sustained demand for credit in other areas. The trends suggest that while the housing market is cooling, household appetite for borrowing in general remains active.
Source Reuters
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