Mortgage approvals for house purchases, an indicator of future borrowing, increased to 62,600 in February, from 60,200 in January, but remain below an average of around 63,500 over the previous six months.
In the consumer credit market, net borrowing increased to £1.9 billion in February, from £1.8 billion in January, slightly above the previous 6-month average of £1.8 billion.
Households’ deposits with banks and building societies increased by £5.8 billion in February, following net deposits of £4.3 billion in January, driven by households depositing an additional £4.6 billion into ISAs.
Richard Pinch, Senior Risk Director at Broadstone, commented: “The Bank of England’s figures for February paint an improving picture of household finances with heartening levels of mortgage borrowing. It suggests that consumer confidence was beginning to return on the expectations of falling borrowing costs, while the data also shows increased consumer credit borrowing and savings as budgets stabilised.
“However, the data already appears significantly out of date given the events in the Middle East through March as the disruption to energy supplies risks sparking a global energy crisis with wide-reaching impacts on UK consumers. The green shoots of encouragement look set to be stamped out as increased energy bills are inevitably likely to lead to broader inflationary pressures throughout the economy.
“Lenders will hope that the looser regulatory regime for mortgage borrowing will help maintain demand in the market against this uncertain backdrop and that the fragility of the economy will not lead to interest rate rises on the same scale as following the Russian invasion of Ukraine.
“Meanwhile the affirmation of the Mortgage Charter following the Chancellor’s meeting with banks late last week is a positive step towards using tailored affordability assessments and flexible payment options to help borrowers through tailored, targeted support.”
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