UK mortgage approvals up in May

According to new data from the Bank of England, mortgage approvals were up in May with 114,000 loans agreed but not yet made during the month. This was substantially above the expected number of 105,000 loans approved as well as higher than the 109,000 loans approved in April. It was the first time since January that the number of approvals went up. At the same time, however, the amount actually lent for mortgages in May dropped to £8.7 billion, the smallest amount since February 2006. Lending amounted to £8.7 billion in April and had been expected to rise to £9.2 billion.

The new figures come in the wake of new figures from Nationwide Building Society that show the annual rate of house price inflation reached 11.1 percent in June. None of this new information has changed analysts’ expectations that the Bank will raise interest rates when its Monetary Policy Committee meets next week. This is especially true in light of the fact that overall consumer lending, which includes credit cards and personal loans, was up by £842 million in May, higher than the £500 million rise that had been expected.

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