March mortgage approvals rise unexpectedly

Approvals for home loans in Britain rose unexpectedly in March, suggesting the housing market continued to recover despite the end of a tax exemption for first-time buyers,Bank of England data showed on Wednesday.

The central bank said mortgage approvals climbed to 49,860 in March from 49,029 in February, confounding analysts' forecasts for a fall to 48,000.

Economists had expected approvals to dip after the expiry of a tax exemption for first-time buyers at the end of March, which had boosted mortgage approvals and house prices earlier this year.

Nonetheless, approvals are still only slightly above half their pre-financial crisis monthly level of 90,000.

Net mortgage lending rose by 1 billion pounds in March down from 1.1 billion pounds in February, in line with forecasts.

The data also showed that consumers borrowed more in March, with net consumer credit rising by 0.4 billion pounds, the biggest rise since September, after a 0.3 billion pounds increase in February.

Credit card borrowing rose by 0.2 billion pounds in March - its biggest increase since last July - after a net repayment of 0.1 billion pounds in February. The data suggest that March's retail sales boost may have been fuelled by credit card debt.

The Bank's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.5 percent on the month after a 0.4 percent fall in February.

Headline M4 broad money supply fell 0.8 percent in March, taking the annual rate down to -5.0 percent, its lowest since records began in 1964.

©Reuters 2012