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

     By David Robinson and Irene Prihoda

     LONDON (MNI) - Bank of England money and credit data showed that in 

June the average interest rates being paid by borrowers on new mortgages 

fell to their lowest level since January 2018 while mortgage approvals, 

a reliable indicator of future housing purchases, nudged higher.

     The growing gloom over the economic outlook, exacerbated by the 

risk of a no deal Brexit, has seen market rate expectations pushed 

lower with near term tightening no longer priced-in and new mortgage 

interest rates have moved down, improving affordability.

     The following are key points from the BOE data sets:

     -The average interest rate on new secured lending fell to 2.02% in 

June from 2.08% in April and May, hitting its lowest level since the 

first month of last year.

     The average interest rate on the stock of mortgages held steady at 

2.42%, indicating no net gain to real household disposable income from 

the move lower.  

     -The number of mortgage approvals rose in June to 66,440 from an 

upwardly revised 65,647 in May, its highest reading since January.

     While approvals picked up the range in recent months has been 

tight, and the broad picture is one of steady demand rather than any 

notable breakthrough to the upside or downside.

     -Net secured lending rose to stg3.731 billion in June, up from 

stg2.938 billion in May but below April's stg3.961 billion. Again, the 

move was within the recent ranges.

    -Unsecured borrowing was little changed in June at stg1.046 billion 

compared stg0.906 billion in May.

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

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