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Bank of England: Money and credit report - Mortgage lending falls to lowest level since July 2021

ended 01. June 2023

The latest Bank of England Money and Credit monthly report has just been published. It revealed that:

  • Borrowing of mortgage debt by individuals continued to decline from net zero in March to £1.4 billion of net repayments in April. This is the lowest level on record, if the period since the onset of the Covid-19 pandemic is excluded.
  • Net mortgage approvals for house purchases fell from 51,500 in March to 48,700 in April, while approvals for remortgaging increased slightly from 32,200 to 32,500 during the same period.
  • The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages rose by 5 basis points, to 4.46% in April.

UK newswire, Newspage, asked brokers for their views.

4 responses from the Newspage community

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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
This latest data from the Bank of England doesn't make good reading and shows the slumber the property market is still in. The tell-tale signs are here that confidence is still rock bottom and the UK economy isn't going anywhere fast. After last month's inflation print putting pressure on the central bank to continue hiking interest rates, these figures might dampen the need to do that, which will be of huge relief to every homeowner.
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Editor
Riz MalikVerified
Independent Financial Adviser at R3 Wealth
The swift increase in interest rates is evidently influencing the mortgage market. Should the Bank of England halt this trend, there might be a chance to improve the outlook for 2023. If not, the housing market could join the broader economy and run the risk of stagnation.
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Graham CoxVerified
Director at Bridging Hub
These latest figures show the life is being sucked out of the mortgage market by the relentless rise of interest rates and, to a lesser extent, the cost of living crisis. The remainder of the year is likely to see significant falls in property values even in the unlikely event the Bank of England base rate rises no further. The government, with an election looming, will no doubt try and pull some rabbit out of the hat to stimulate demand, which would be a mistake. A long overdue correction in house prices is what's needed now. Kicking the can down the road is no longer an option.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
This business always has rises and falls, the trick is to be ready for a fall and shore up your defences beforehand. Financial planning should look to more than 2 years, you should be thinking about trends for the long term. People are just being wary and remortgaging again rather than moving. Stability in this industry is essential to keep those wheels greased and when someone stops that stability, the metaphorical wheels start to grind.