Mortgage Approvals Dip, but Britons Still Borrow More
New figures from the Bank of England have revealed that mortgage approvals dipped slightly last month, but Britons still borrowed more cash to get on the housing ladder. Savers also invested a record amount into ISAs for the month, as households seek to benefit from 16-year-high interest rates.
Households seek to benefit from high interest rates
According to the data, there were 61,100 mortgage approvals for house purchases in April, representing a slight drop from the 61,300 recorded in March. This had been the highest level since September 2022, amid signs of increased activity in the UK housing market.
Mortgage rates edged slightly higher in April as some lenders pushed back expectations for when the Bank of England will next reduce interest rates from their current rate of 5.25%. Approvals for remortgaging also decreased to 29,000 for the month, from 33,500 in March.
However, there was an increase in net mortgage borrowing for the month, up to £2.4 billion of mortgage debt from £0.5 billion a month earlier. Meanwhile, consumer credit borrowing decreased to £0.7 billion in April from £1.4 billion, as households spent less on credit cards.
Households deposited £11.7 billion into ISAs, the highest for the savings account since records began in 1999
The data also found that households’ holding of money increased by £8.4 billion for the month. This came as households deposited £11.7 billion into ISAs, the highest for the savings account since records began in 1999.
“Households are seeking to benefit from high interest rates by investing in ISAs,” said a financial expert. “This is a great way for people to save money and earn a higher return on their investments.”
The increase in mortgage borrowing and ISA deposits suggests that households are taking advantage of the current interest rate environment to secure their financial futures.
Households are taking advantage of high interest rates to secure their financial futures
As the Bank of England continues to monitor the economy, it remains to be seen how interest rates will affect the housing market and household finances in the coming months.
“The data suggests that households are being cautious with their finances, but are still willing to invest in their futures,” said another expert. “This is a positive sign for the economy, and we can expect to see continued growth in the coming months.”
