UK mortgage approvals rise to 4-month high, Bank of England data shows

UK mortgage approvals rise to 4-month high, BoE data shows

LONDON, May 1 (Reuters) – British lenders approved the most mortgages in four months in March while consumer lending grew at the fastest ​annual rate in over two years, according to Bank of England ‌data which showed some resilience in the economy at the start of the Iran war.

The number of mortgages approved for house purchase – a leading indicator for home sales – ​rose to 63,531 in March from 62,708 in February, the highest ​number since November and bucking economists’ expectations in a Reuters poll ⁠for a fall.

Friday’s data also showed net unsecured lending to consumers rose ​by 1.895 billion pounds ($2.58 billion) in March, slightly less than in February but above economists’ forecast ​of a 1.75 billion pound increase, and representing the fastest annual credit growth since January 2024 at 8.9%.

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A drop in consumer confidence since the start of the Iran war and the prospect of higher ​mortgage rates have caused property surveyors and mortgage lender Halifax to report falling prices and lower buyer demand ​in March.

But figures from Nationwide Building Society released earlier on Friday showed house prices continuing to rise modestly in ‌April, ⁠increasing by 3.0% from the same month in 2025.

Rob Wood, chief UK economist at Pantheon Macroeconomics, questioned how long the trend would continue.

If the BoE raised borrowing costs as markets expect, the interest rate on a new ​two-year fixed-rate mortgage at ​75% loan-to-value looked ⁠set to rise to 4.8% in the coming months, up from 4.5% now and 3.9% at the start of ​the year, he said.

“Accordingly, we look for house price ​inflation of ⁠just 1.0% in Q4 2026,” Wood said.

On Thursday, the BoE kept interest rates unchanged at 3.75%. Governor Andrew Bailey said there was a range of possible paths ⁠for ​interest rates, depending on how long the Strait ​of Hormuz remained closed, and that he would not push back against market expectations for two ​quarter-point rate rises this year.