UK mortgage approvals drop on new affordability rules
Britain’s lenders approved the fewest number of mortgages in May in almost a year as activity cooled in the housing market in the wake of new affordability rules.
Bank of England data on Monday showed banks approved 61,707 mortgages for house purchases in May, the fewest since June last year. Monthly mortgage approvals have averaged about 70,000 over the past six months as the housing market has roared back into life and prices have climbed by about a tenth.
Economists said the decline in mortgage approvals was probably linked to the UK’s new mortgage affordability tests, which started in April.In a reflection of that recovery, net mortgage lending, which tends to lag approvals, rose at an annualised rate of 1.8 per cent, the fastest since 2008.
Last week, the BoE also announced some new curbs on mortgage borrowing to stop too much household debt from building up in the future, but it did not set them at levels that would curb current lending.
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