UK mortgage approvals rebound more strongly than expected in September

British mortgage approvals picked up more strongly than expected last month as the housing market showed some signs of recovery after June’s vote to leave the European Union, Bank of England data showed on Monday.

However, the number of mortgage approvals – a gauge of future housing market activity – remained below its level in the months running up to the referendum, and growth in consumer borrowing also eased from recent highs.

Mortgage approvals for house purchases rose to 62,932 in September from 60,984 in August, their highest since June and easily beating the average forecast of 60,150 in a Reuters poll.

Less comprehensive figures from the British Bankers’ Association released last week had also shown the number of mortgages approved by banks rose last month from a 19-month low set in August, but were still 15 percent down on a year earlier.

The BoE data painted a somewhat weaker picture for consumer lending than the BBA’s figures.

Consumer lending rose by 1.405 billion pounds on the month – slightly below economists’ expectations and slowing from growth of 1.635 billion pounds in August.

The annual growth rate for consumer borrowing in the third quarter as a whole dropped to 9.6 percent from 10.7 percent in the three months to August, its slowest rate this year.

Business lending showed a stronger trend, with overall lending to non-financial firms up by 1.001 billion pounds and annual growth in small business lending at its highest rate since the comparable records began in 2012.

Before the referendum, Britain’s government warned that a vote to leave could reduce a projected rise in house prices by 10 percentage points, and in August the BoE said it expected monthly mortgages approvals to fall to 56,000 in the second half of the year – the lowest since early 2013.

More recently, however, the BoE has said the housing market is not slowing as much as it expected, especially outside London, and the Royal Institution of Chartered Surveyors has said buyer inquiries rose for the first time since February.

Net purchases of British government bonds by foreign investors spiked to 13.3 billion pounds in September, up from 1.8 billion pounds in August and the highest since October 2015 in what is a volatile series of data.

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