(Alliance News) - Net mortgage lending stalled in the UK in March, according to Bank of England data on Thursday, while mortgage approvals continued to rise.
Mortgage lending to individuals fell to net zero in March from a net flow of GBP700 million in February.
"Looking at the period prior to the onset of Covid-19 in March 2020, this is the lowest level of net borrowing since June 2011 (GBP300 million of net repayment)," the BoE said.
However, net approvals increased for the second month in a row, reaching 52,000 in March compared to the upwardly revised figure of 44,100 the month before.
March's figure was higher than FXStreet-cited market consensus of 46,250.
The effective interest rate on newly draw mortgages, meaning the actual interest rate paid, increased to 4.41% from 4.24%. On the outstanding stock of mortgages, it rose to 2.73% from 2.64%.
The BoE's own benchmark interest rate is currently 4.25%, following a 25 basis point hike in late March. However, it was 4.00% for most of March.
The BoE noted individuals borrowed a further GBP1.6 billion in consumer credit in February, compared to GBP1.5 billion the month before.
"The additional consumer credit borrowing in March was split between GBP700 million of borrowing on credit cards, which was broadly unchanged from February, and GBP900 million of borrowing through other forms of consumer credit (such as car dealership finance and personal loans)," it said.
By Elizabeth Winter, Alliance News senior markets reporter
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