London Daily

Focus on the big picture.

UK Mortgage Lending Hits Record Low Amid Housing Market Stress

UK Mortgage Lending Hits Record Low Amid Housing Market Stress

UK Mortgage Lending Hits Record Low Amid Housing Market Stress.
The UK housing market is experiencing growing stress as mortgage lending has collapsed to the lowest monthly level on record, according to the latest figures from the Bank of England.

The Bank reported that borrowing of mortgage debt fell sharply in April, with consumers repaying £1.4bn more than was taken out in new lending on the month.

This is the lowest level since records began in 1993, excluding the Covid pandemic.

The figures reflect the central bank's most aggressive round of interest rate increases in decades, which has started to impact the property market.

The Nationwide building society also released data showing that house prices fell in May at an annual rate of 3.4%, representing the sharpest fall since July 2009.

Martin Beck, chief economic advisor to the EY Item Club, said, "The numbers point to a housing market struggling in the face of pressure on household finances and higher mortgage rates.

And rates could head up further, putting more pressure on housing market activity." The Bank reported that net mortgage approvals for house purchases fell from 51,500 in March to 48,700 in April, while remortgaging approvals increased slightly from 32,200 to 32,500.

The effective interest rate – the rate paid by consumers – on newly drawn mortgages rose by 5 basis points to 4.46%.

Banks and building societies have pulled almost 800 residential and buy-to-let mortgage deals in the past few days and warned homeowners looking for new mortgage deals to prepare for fixed rates above 5% in the coming weeks.

Nationwide said that house prices had largely remained flat over the past month after seasonal effects were taken into account, taking the average price of a home in the UK to £260,736.

However, the building society warned that the housing market was facing "headwinds" that would increase in the coming months.

Robert Gardner, the Nationwide chief economist, warned that interest rates would remain high for longer than previously expected.

Related Articles

London Daily
EU to Transfer Interest from Frozen Russian Funds to Ukraine
Greenpeace Co-Founder Paul Watson Arrested in Greenland
EU Relocates Summit to Punish Hungary over Orban's Ukraine Visit
Netanyahu Seeks Meeting with Trump During Washington Visit
World's Hottest Day Recorded on July 21
UK Labour Government To Halt Migrant Housing on Accommodation Barge
President Biden Returns to White House After Testing COVID Negative
Trump Says Kamala Harris Would Be Easier Election Opponent Than Biden
Thousands Protest in Mallorca Against Mass Tourism
Immigration Crackdown Targets Car Washes and Beauty Sector
Nigeria's Controversial Return to Colonial-Era National Anthem
Hacking Vulnerabilities: Androids vs. iPhones
Ukraine Crisis Should Be EU's Responsibility, Says Trump’s Envoy
A Week of Turmoil: Key Moments in US Politics
Barrow's Sacred Heart Primary School Faces Long-Term Closure
German National Sentenced to Death in Belarus
Elon Musk's Companies Drop CrowdStrike After Global Windows 10 Outage
US Advises India on Russian Ties Amid Geopolitical Shifts
Trump Pledges to End Ukraine Conflict if Reelected
Global IT Outage Unveils Digital Vulnerabilities
Global IT Outage Sparks Questions About Financial Accountability
CrowdStrike Bug Affects 8.5 Million Windows Devices
Flights Resume After Major Microsoft Outage
US Criticizes International Court's Opinion on Israeli Occupation
CrowdStrike Update Causes Global IT Outage Due to Skipped Quality Checks
EU’s Patronizing Attitude Towards Africa Revealed
Netanyahu Denounces World Court Ruling on Israeli Occupation
Adidas Drops Bella Hadid Over Controversy
Global Outage Caused by CrowdStrike Update Impacts Millions
Massive Flight Cancellations Across the U.S. Due to Microsoft Outage
Global Windows Outage Causes Chaos Across Banks, Airlines, and More
Russia Accuses Ukraine of Using Chemical Weapons
UK's Flawed COVID-19 Planning Exposed by Inquiry
Ursula von der Leyen Wins Second Term as European Commission President
Police Officer Injured in Attack in Central Paris
Hulk Hogan absolutely tore it up at the RNC.
Paris is being "cleansed" of migrants and homeless people ahead of the Olympics.
Lamine Yamal arriving at his school after winning the Euros
Campaigners Urge UK Government to Block Shein's London IPO
UK Labour Government's Legislative Agenda
UK Labour Government to Regulate Powerful AI Models
Record Heat Temperatures in Ukraine Amid Power Crisis
UK Government Plans to Remove 92 Hereditary Peers from House of Lords
King Charles III Delivers Labour Government's First King's Speech
Officials Remove 'Disastrous' Label from Liz Truss's Mini-Budget
Keir Starmer Outlines Ambitious Plans for Government
Japan to Allocate $3.3 Billion to Ukraine Using Frozen Russian Assets
EU Parliament Condemns Hungarian PM's Russia Visit
FBI Struggles to Find Motive Behind Trump Shooting Incident
Kremlin Criticizes EU Rejection of Orban’s Ukraine Peace Proposal