British Home Lending Still in Doldrums

The British housing market is considered to still be in the doldrums, despite the Bank of England’s revelation that mortgage approvals edged higher in August. The number of approvals for house purchase in August increased by 109 to 47,665 from 47,556 in July. This followed an 18-month low of 44,252 in June, the bank said. Mortgage approvals remain down by nearly 10 per cent from 52,896 in August last year and below the average level of 50,318 seen through the first seven months of 2012.

“With demand for mortgage finance still constrained by a lack of confidence, and credit conditions continuing to hold back supply, housing market activity is likely to remain depressed for some time yet,” said Matthew Pointon, Property Economist at Capital Economics. Borrowers have faced a tougher time trying to take out home loans in recent months as lenders have tightened their borrowing criteria, causing a drop in the proportion of mortgages approved.

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