If you are covering the latest Bank of England money and credit statistics, please see the following comment from Rosie Hooper, chartered financial planner at Quilter Cheviot:
"The latest Bank of England money and credit statistics for August, combined with this morning’s house price growth figures from Nationwide, paint a picture of a UK housing market that is regaining momentum amid easing borrowing costs and renewed buyer activity.
"Individuals borrowed a net £2.9 billion in mortgage debt in August, up slightly from £2.8 billion in July, reflecting continued demand for housing. Mortgage approvals also rose to 64,900, the highest level since August 2022, indicating that prospective buyers are taking advantage of improving market conditions and lower mortgage rates. The rise in remortgaging approvals from 25,200 to 27,200 further suggests that homeowners are responding to falling borrowing costs by locking in more favourable deals.
"According to Nationwide this morning, house prices are growing at their fastest annual rate in nearly two years. Part of the reason for this is that income growth has so far outpaced house price increases, which combined with falling borrowing costs has boosted confidence improved affordability for many buyers.
"The fall in mortgage rates has been a key driver of this trend. With the Bank of England holding its base rate at 5% in its last review, and lenders offering five-year fixed rates at the 4% mark means the environment has become more favourable for buyers. Many lenders have also increased their lending limits, with some now offering loans of up to six times household income.
Consumer borrowing and savings
"Meanwhile, consumer credit borrowing rose slightly in August, reaching £1.3 billion from £1.2 billion in July. This was driven primarily by higher net borrowing through consumer credit such as personal loans, while net borrowing through credit cards was little changed at £0.5 billion in August.
"Though reliance on borrowing ticked up, it appears more families have been able to put more money into savings as the pressures of the cost of living crisis further ease. Household savings saw an increase of £7.3 billion in August, up from £5.9 billion in July. Of this, £4.2 billion was deposited into ISAs. Given the squeeze on the various tax allowance, such as capital gains tax, as well as the rumours which are now building ahead of Labour’s upcoming budget, it is unsurprising more people are turning to ISAs for their tax efficiency."
