UK Mortgage Approvals Rise Unexpectedly

(RTTNews) - Mortgage approvals in the UK increased unexpectedly in December as home buyers rushed to avoid higher stamp duty from April, official data revealed Thursday.

The number of mortgage approvals for house purchases increased to 66,500 in December from 66,000 in November, the Bank of England said. Approvals were expected to fall to 65,000.

The actual interest paid on newly drawn mortgages decreased by 3 basis points to 4.47 percent in December, the lowest since April 2023.

Net borrowing of mortgage debt by individuals rose GBP 1.0 billion to GBP 3.6 billion in December.

In December, net consumer credit totaled GBP 1 billion, slightly up from GBP 0.9 billion in the previous month. Annual growth in consumer credit decreased slightly to 6.5 percent in December from 6.6 percent a month ago.

Further, data showed that UK businesses repaid a net GBP 0.2 billion of loans from banks and building societies, following GBP 6.1 billion of net borrowing in November.

Today's data suggests the downbeat economic outlook is not weighing on households borrowing and spending decisions too heavily, Ashley Webb, an economist at Capital Economics said.

This provides some encouragement that the economy avoided a contraction in the fourth quarter, Webb noted.