Mortgage approvals fall as Britons scale back on borrowing
29th March 2023 11:15
by Myron Jobson from interactive investor
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interactive investor comments on the latest BoE Money & Credit report.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The latest Bank of England mortgage lending figures suggests there might have been something of a hangover effect in February months on from the ill-fated mini-Budget, which resulted in a surge in mortgage rates and a reduction in the availability of home loans. While the damage to mortgage rates inflicted by the market reaction to the fiscal event has been addressed, consumer confidence remains shaken. Mortgage rates have fallen slightly in recent months, but they remain high, which is difficult to stomach amid the cost-of-living squeeze on budgets.
“It has been a winter of discontent for the housing market, but the season is typically a quiet period for real estate. The upcoming crucial spring buying season could give us a clear indication of the state of the property market.”
Borrowing and savings
“Britons scaled back on borrowing and tucked more savings away in February as consecutive interest rate hikes have inflated credit interest rates. It has becoming increasingly expensive for many of those with a budget shortfall to borrow money to make up the difference. People may also be shunning other forms of credit such as car financing until a time when they can afford the repayments. Meanwhile, there has been a reprieve in savings rate, which provides the impetus to top up on rainy day funds, for those who can afford to, as inflation remains stubbornly high.”
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