Mortgage approvals fell to their lowest level since June 2020 in November as activity in the housing market eased following a rush last year caused by the stamp duty tax holiday.
Lenders sanctioned 67,000 mortgages in November, a slight dip on the 67,199 home loans approved in October, according to Bank of England data, while net borrowing increased to £3.37 billion from £1.1bn the previous month.
“November’s increase follows low net lending figures in October after borrowing was brought forward to September to take advantage of stamp duty land tax relief, before it was completely phased out,” the BoE said.
“The net borrowing in November was however £2.9 billion below the 12-month average to June 2021, when the full stamp duty holiday was in effect.”
The flat mortgage approval rate, which acts as an indicator of future borrowing, was the lowest since the middle of 2020 when the market was just emerging from the first lockdown. However, it was close to the 12-month average seen in the run-up to February 2020 before the pandemic brought the country to a standstill.
Meanwhile, approvals for remortgaging, which only analyses new home loans with a different lender, rose to 44,500 in November.
Independent housing analyst Anthony Codling said the latest mortgage data indicated that Britain's housing market has quickly returned to normal without the tax incentive.
“Perhaps, when it comes to moving home, macroeconomic events do not impact household decisions as much as we may believe. If you have changed job or your family has outgrown its current home, concerns about inflation and Covid are secondary, and if you have to move, you generally do," he said.
Separately, British consumers increased their borrowing in November by the most in 16 months, with consumer credit rising by a net £1.2bn, more than expected and much higher than the £0.8bn uplift in October.
With £0.9bn of that increase borrowed on credit cards, it was a further sign the economy was picking up before fears over the spread of the Omicron variant of coronavirus set in.
Household cash deposits also grew at a slower rate in November indicating stronger consumer confidence ahead of the festive month.
However, Bethany Beckett, UK economist at Capital Economics,said the data seemed like “old news” when compared against surging Covid-19 cases in December, which is expected to see households less willing to borrow.
With real household income facing a squeeze in 2022 amid higher inflation, rising energy bills and increased taxation, “we suspect consumer spending may struggle to make much headway over the next few quarters” Ms Beckett added.
Company profile
Name: GiftBag.ae
Based: Dubai
Founded: 2011
Number of employees: 4
Sector: E-commerce
Funding: Self-funded to date
UAE currency: the story behind the money in your pockets
Freezer tips
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The specs
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Transmission: nine-speed automatic
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The candidates
Dr Ayham Ammora, scientist and business executive
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Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
'Ashkal'
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
