Bank of England Reveals February Dip in Mortgage Lending

The Bank of England (BoE) revealed today that there was an unexpected drop in the number of approvals for mortgages last month, taking the figures to their lowest ebb since June 2011. The data published by the BoE showed that there was a fall in the amount of net mortgage lending, while the amount of unsecured personal loans actually increased. February saw a £0.4 billion increase in consumer credit and a £0.4 billion drop in net mortgage lending. Previously, analysts had been predicting a £0.2 billion increase in consumer credit and a £1.4 billion pounds increase in net mortgage lending. Overall, the amount of mortgages approved in February this year stood at 48,986, a sharp fall compared to January’s figure of 57,899. Analysts had been expecting the February figures to be over 10,000 higher than this, and some took the opportunity today to warn that the UK may be seeing the end of the recent modest recovery in property prices. This prognosis was given extra weight by the recent statement by mortgage lender Nationwide, which said that house prices had fallen by 1 per cent this month the sharpest fall since 2010 and by 0.9 per cent throughout the year, which represented the steepest annual drop in nine months. The general trend among consumers has been to limit borrowing due to the uncertain economic conditions, increasing unemployment and the austerity measures implemented by the Coalition government. Despite this, another BoE survey has shown that Britain’s banks believe that there will be improved demand for mortgages in the second quarter of the year,