UK mortgage approvals drop in May

Mortgage approvals in the UK unexpectedly fell in May, according to figures from the Bank of England.

Mortgage approvals for house purchases dropped to 64,434 in May from 67,580 in April, falling short of analysts’ expectations for a rise to 68,600.

“While the Bank of England reported that mortgage approvals for house purchases dipped in May, it does not fundamentally undermine our belief that housing market activity is on the up,” said Howard Archer, chief European and UK economist at IHS Global Insight.

“Firstly, it is very possible that housing market activity was held back early on in May by heightened uncertainty ahead of the general election. Secondly, May’s dip in mortgage approvals followed a particularly strong jump in April,” he added.

Also on Monday, data from the BOE showed that net lending to individuals rose by £3.1bn in May, below analysts’ estimates but up from £2.9bn in April.

Meanwhile, the M4 money supply rose by a seasonally-adjusted 0.5% in May, up from 0.4% in April.