MNI POLICY: BOE: Mortgage Approvals Dip, Interest Rates Up>

     By David Robinson

     LONDON (MNI) - Mortgage approvals, a reliable indicator of future 

housing market activity, declined in August while the average interest 

rates on new loans edged higher, Bank of England data showed. 

     The data were indicative of a housing market that is drifting 

sideways rather than showing, as yet, any clear downtrend. 

     The following are key points from the BOE Money and Credit data 

sets: 

     -The average interest rates paid by borrowers on new mortgages rose 

to 2.04% from 2.03% in July and June's 2.02%, which was the lowest level 

since January 2018. 

     Market expectations have shown a rising likelihood of the next move 

in Bank Rate being up, rather than down, and any further rise in 

borrowing rates is more likely to reflect widening margins rather than 

increasing funding costs for lenders.   

     -The average interest rate on the stock of mortgages edged up to  

2.42% in August from 2.41% in July and matching the figure for May and 

June. The data show point to next to no change in household mortgage 

costs in recent months. 

     -The number of mortgage approvals fell to 65,545 in August from 

67,011 in July. It was last lower in March, when it stood at 62,617. 

     There is little clear trend in the mortgage data, with the current 

range fairly tight in a series which had a low of 26,353 in November 

2008 and a high of 132,404 in December 2003. 

     -Net secured lending also fell, to stg3.854 billion in August, down 

from stg4.521 billion in July but up from June's stg3.796 billion. 

     Unsecured borrowing dipped in August to stg0.901 billion compared 

stg1.007 billion in July. 

 -London newsroom: e-mail: david.robinson@marketnews.com  

[TOPICS: M$B$$$,M$$BE$,MABDS$]