–BOE: UK Feb House Purchase Approvals 48,986 vs 57,899 Jan
–BOE: UK Feb House Purchase Approvals Lowest Since June 2011
–BOE: UK Feb Net Mortgage Lending Change m/m +stg1.2bn
–BOE: UK Feb Net Consumer Credit +stg0.4bn
–BOE: Feb M4 Ex-IOFCs -0.4% m/m; +2.5% 1Q/3m Ann.; +2.9% 4q/12m
–BOE: UK Feb M4 -1.9% m/m; -3.4% y/y; M4 Lending -3.2% y/y
–BOE Credit Svy Sees Secured Household Credit Broadly Unchanged
–BOE Credit Svy: Unsecured Hhold Credit Seen Broadly Unch Q1
–BOE Credit Svy: Credit Access Broadly Unch For SMES, Large Firms

LONDON (MNI) – UK mortgage approvals dropped to their lowest level
since June 2011 in February, the Bank of England data showed Thursday.

Approvals fell to 48,986 from 57,899 in January, following a
sustained period of approvals coming in well above the 50,000 mark. The
latter had tentatively reassured policymakers and economic commentators
that housing market activity might have bottomed out.

The fall may be linked to the ending of the holiday on stamp duty
for some house purchases, a major factor in the sharp drop seen in
the Nationwide house price index in March, which was released earlier
this morning.

The latest monetary and lending report from the BOE also showed
renewed weakness in the monetary aggregates, with M4 seeing its sharpest
fall ever on the month and on the year, at -1.9 m/m and -3.4% on the
year.

But the BOE advised looking at the M4 excluding IOFCs measure,
which was only down 0.4% on the month.

That said, the latest data adds to evidence that the moderate
recovery seen at the start of the year in the PMIs as well as in other
data, may be losing what little momentum it had.

Net lending secured on dwellings rose stg1.2bn on the month, weaker
than January’s stg1.6bn rise but still well above the levels seen in
December (stg1.0bn) and November (stg0.7bn).

In its Q1 Credit Conditions Survey released at the same time, the
Bank said that credit access across a range of categories, including
secured and unsecured household credit and corporate credit had remained
“broadly unchanged” through Q1.

“Lenders expect credit availability to decrease for households in
the coming quarter, but remain unchanged for firms of all sizes,” the
survey said.

The BOE said that demand for secured household lending was reported
to have increased and was expected to rise further, but household demand
for unsecured credit and demand from SMEs as well as large firms had
fallen.

Default rates fell on secured and unsecured household loans, and
were expected to stabilise in the next three months, the BOE said.
Defaults among large and medium-size firms had increase and were
expected to rise further.

More worrying still for the BOE’s Monetary Policy Committee, the
survey reports that “spreads on secured lending to households and
lending to large and medium-sized firms increased markedly over the
quarter, and lenders expected a further increase in the coming three
months”.

–London newsroom: +44 207 862 7492 email: dthomas@marketnews.com

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