Bloomberg News

U.K. BBA Mortgage Approvals Decline for First Time Since April

October 25, 2011

Oct. 25 (Bloomberg) -- U.K. mortgage approvals fell for the first time in five months in September as concerns about the economic outlook curtailed demand for loans, the British Bankers’ Association said.

Lenders granted 33,130 loans to buy homes, down from a revised 35,069 in August, the London-based trade group said in an e-mailed report today. From a year earlier, mortgage approvals were up 7.7 percent.

The U.K. housing market is struggling to gain momentum as banks restrict lending and consumers’ spending power is squeezed by inflation that accelerated to a three-year high last month. The Bank of England expanded stimulus earlier this month to aid the economic recovery as the European sovereign debt crisis weighs on the economy.

“Households are limiting their borrowing in the face of unemployment concerns and pressure on household finances amid general economic uncertainty,” David Dooks, director of statistics at the BBA, said in the report.

The BBA report also said that demand for unsecured loans remains “weak” and that repayments of loans and overdrafts continue to outweigh new lending.

--Editors: Fergal O’Brien, Eddie Buckle

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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