MNI 5 THINGS: Mortgages Approvals Highest Since Jan - BOE

By David Robinson and Jai Lakhani

     LONDON (MNI) - The number of mortgages approved rose to the highest level

since January while average rates on "shop window" mortgages edged higher, Bank

of England data published Thursday showed.

     The following are key points from the data:

     --The number of mortgage approvals rose to 67,086 in October from 65,726 in

September, the highest reading since the 67,264 registered in January. Mortgage

approvals are a reliable indicator of housing market activity in the months

ahead, and these data point to an uptick in house purchases.

     --Borrowing is set to become more expensive. The most common UK mortgages

are 2 and 3 year fixed rates at around a 75% loan-to-value (LTV) and the data

showed these higher by 8 basis points and 4 basis points respectively in

October.

     --Consumer credit failed to see an expected rebound in October. Other loans

and advances were low in September due to emissions standards weighing on demand

for car financing. However, the category remained weak in October at stg0.5 bn,

significantly below its 6 month average of stg0.8 bn and it was the main drag on

consumer credit.

     --Mortgage supply at the highest risk segment of the market meant that

offered rates on 95% fixed rate LTVs continued to hit their lowest levels on

record. Two-year and five-year quoted fixed rates both dropped by 6 basis points

in comparison to September.

     --It appears that the rise in the Bank Rate in August is being passed on,

rewarding savers and penalising borrowers. Consumer credit overdrafts remained

unchanged in four months and at their highest rate since October 2017 at 19.68%.

However, the deposit rate on a 2 year fixed rate bond reached its highest rate

since October 2015 at 1.42%.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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