January 27, 2020 / 9:51 AM / a month ago

UK banks approve most mortgages since 2015 - UK Finance

FILE PHOTO: Rows of houses are seen in High Wycombe, Britain, February 7, 2017. REUTERS/Eddie Keogh

LONDON (Reuters) - British banks approved the highest number of mortgages in more than four years in December, industry group UK Finance said on Monday, adding to signs of a turnaround in the country’s housing market since last month’s election.

Mortgage approvals for house purchase hit 46,815 last month on a seasonally adjusted basis, the most since August 2015, according to UK Finance’s data.

The value of mortgage lending rose by the most since March 2016, shortly before voters decided to leave the European Union, up by a net 3.773 billion pounds.

“December’s jump in mortgage approvals adds to a growing amount of firmer data and survey evidence suggesting that the housing market could well be changing up a gear after a lacklustre 2019,” Howard Archer, an economist with forecasters EY ITEM Club, said.

The Bank of England is discussing this week whether to cut interest rates in response to weak economic data at the end of 2019, or put faith in early signs of a recovery since the election.

Earlier this month, the Royal Institution of Chartered Surveyors said Britain’s housing market got a boost from Prime Minister Boris Johnson’s big election win, with agreed home sales rising for the first time since May.

But there were also signs of caution among households in Monday’s UK Finance data. Consumer credit grew by an annual 4.0% in December, the joint weakest pace since April of last year, and credit card lending was up by 2.4%, its second-weakest performance since late 2014.

Reporting by William Schomberg, editing by David Milliken

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