Mortgage Market Shows Resilience Amid Rising Interest Rates
The UK mortgage market has demonstrated its resilience in the face of rising interest rates, with mortgage approvals dipping only slightly last month. According to data from the Bank of England, there were 61,100 mortgage approvals for house purchases in April, a minor drop from the 61,300 recorded in March.
Mortgage approvals remain steady despite rising interest rates
The slight decrease in mortgage approvals can be attributed to the slight rise in mortgage rates in April, which may have raised borrower concerns about affordability and confidence. However, the average interest rate paid on newly-drawn mortgages increased only slightly, by 7 basis points to 4.74%, reflecting some higher mortgage pricing on the back of rising Swap rates.
Meanwhile, consumer credit borrowing dropped to £0.7 billion in April from £1.4 billion, as households spent less on credit cards. The data also revealed that households’ holding of money increased by £8.4 billion for the month, with £11.7 billion deposited into ISAs, the highest for the savings account since records began in 1999.
Savers take advantage of high interest rates
In other news, the Treasury has sold off a further £1.2 billion in NatWest shares, reducing the taxpayer’s stake in the bank to 22.5%. The move comes after a planned public share sale in the lender this summer was scrapped following the Prime Minister’s call for a general election.
Government reduces stake in NatWest
The UK mortgage market’s ability to withstand rising interest rates is a positive sign for the economy, and with interest rates expected to decrease in the near future, it’s likely that mortgage approvals will continue to remain steady.
Interest rates expected to decrease
In conclusion, the UK mortgage market has shown its resilience in the face of rising interest rates, and with savers taking advantage of high interest rates, the economy is likely to continue on a positive trajectory.
Mortgage market remains steady despite challenges
