LONDON May 4 British lenders approved the lowest number of mortgages in six months in March, the Bank of England said, adding to signs of caution amongst home-buyers who are facing a pinch on their finances after last year's Brexit vote.
The BoE said on Thursday the number of approvals of mortgages for house purchases fell to 66,837, below the median forecast of 67,400 in a Reuters poll of economists and its lowest level since September of last year.
The BoE said net mortgage lending, which lags approvals, rose by 3.105 billion pounds in March, compared with a forecast for an increase of 3.4 billion pounds in the Reuters poll.
In year on year terms, the increase in mortgage lending was the weakest since November 2015.
The data also showed a further slowdown in the year-on-year pace of borrowing by consumers, another signal of how households are reining in their spending in the face of rising inflation after last year's referendum decision to leave the European Union.
Consumer credit in the 12 months to March grew by 10.2 percent, the weakest increase since July of last year, although on the month it picked up a bit up of speed to rise by 1.624 billion pounds, more than the increase of 1.3 billion pounds expected by analysts taking part in a Reuters poll.
Spending by households helped Britain's economy to grow strongly last year, despite the shock of the vote in June to leave the EU.
The BoE expects growth to slow in 2017 as rising inflation, triggered by the post-Brexit vote fall in the value of the pound, eats into the spending power of consumers.
Furthermore, Britons are saving less than at any time in the last eight years, raising questions about how long they are likely to continue borrowing so freely.
BoE Governor Mark Carney has noted how Britain's growth has been reliant on consumers.
The BoE also said foreign investors were marginally net buyers of British government bonds last month. Net purchases totalled 0.218 billion pounds in March compared with purchases of 0.758 billion pounds in February.
In December of last year and January this year, combined net sales topped 10 billion pounds after near record buying in the previous three months.
(Reporting by William Schomberg and David Milliken)