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British banks approve fewer mortgages in November

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The number of mortgages approved by British banks fell slightly last month after hitting a five-month high in October, while consumer credit continued to expand strongly, industry figures showed on Wednesday. The British Bankers' Association (BBA) said banks approved 40,659 mortgages in November, falling from 40,835 in October and down 9 percent compared with a year ago.

Credit card lending increased by 231 million pounds, the biggest increase in four months.  Reuters

 

Especially the London housing market is starting to cool.

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22 minutes ago, rollover said:

... fell slightly last month after hitting a five-month high in October ...

It's somewhat encouraging that they're falling, but the five month high in October is less so.

Reuters always strikes me as the ADHD kid of news sources: it makes a big song and dance about anything that happens today, but there is essentially no history or context for any of their stories (the one year comparison is a remarkable amount of analysis by their standards). Of course, that's their business model, and it's up to us to fill in the interpretation.

I remember people saying that 60k mortgages per month tends to be the balance point for zero price movements over the next quarter or so. Anyone have an idea if that is supported by good data, and whether that 60k figure changes through the year?

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HSB-graph2.jpg

Mortgage approvals

House purchase approval numbers are 9% lower than in November 2015 and in the first eleven months of 2016 were 4% lower than in the same period of 2015.

Remortgaging approvals were 14% higher than those in November 2015 and in the first eleven months of 2016 were 13% higher than in the equivalent period of 2015.

Other advances were 10% higher than a year ago.

Surprise!!! remortgaging 14% up YoY.  

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I reckon the new purchase loans will continue to decline from here, probably with a fair jump down in Jan from HTB2 ending, and remortgaging will continue to increase with the increasing threat of IR rises.

That figure of 60k approvals being the threshold of price increases/declines is clearly nonsense. It is a factor of demand, and supply, and price, and risk. All of which change month to month, year to year. It may have held true in the past, but the market is not in a usual state.

I'm pencilling February in as the HPC due date now. We'll know for sure if it's on or not before the end of that month. I think it is.

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