MNI: UK December Mortgage Approvals Remain Subdued: UK Finance

--Dec Mortgage Approvals 38,779 vs 39,205 November: UKF

By Jai Lakhani

     LONDON (MNI) - Mortgage approvals declined for a second consecutive month

in December and fell to a 3-month low, continuing to signal weak but stable

demand in the UK housing market, UK Finance (UKF) data published Friday showed.

     The December UKF figures provide further evidence that housing market

activity ended the year with a chill, with approvals a good indicator of future

house purchase levels. 

     In December there were 38,779 mortgage approvals, down from 39,205 in

November.  

     December's outturn means approvals will have declined on a m/m basis 7 out

of 12 times, which -- although not out of line with historical records --

remains concerning given the low base at which approvals have found themselves

over the year.

     In 2018, approvals have averaged 39,118 per month, significantly below the

51,024 series average (record began in September 1997) and also its six-month

average of 39,205. 

     That said, on a year-over-year basis December's result, up 6.17% y/y, did

end a run of 14 consecutive declines. 

     --REMORTGAGES   

     Remortgage approvals also slid in December, down to 26,600 from 27,211 in

November. 

     Over 2018 as a whole, remortgage approvals have averaged 28,432 per month,

so November's near-1,000 drop combined with December's fall suggests households

are unwilling to renegotiate the terms of their mortgage or that they are not

currently looking to free up liquidity to fund potential major purchases.     

     "Mortgage lending grew in December compared to the previous year, with

borrowers defying seasonal trends and purchasing a property throughout the

festive period," Eric Leenders, UK Finance Managing Director for Retail Banking

said.

     "Growth in credit card spending continues to be largely offset by increased

cardholder payments, with almost half of cards not bearing any interest at all.

This reflects the growing trend of consumers using credit cards as a preferred

payment method rather than as a means of borrowing, in order to take advantage

of additional protections and value-added benefits," he added.

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

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

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