UK mortgages reach 13-year high, consumers wary of borrowing

U.K. housing market shows no signs of slowing down as lenders approved 13-year high mortgages in October, according to data released by the Bank of England on Monday. However, the figures also showed a growing weariness on day-to-day borrowing among many consumers.

Mortgage approvals for house purchase in October reached 97, 532, higher than the previous 92,091 in September, and even higher than all the predictions made by the Reuters poll of economists. Household savings was up by 12.3 billion pounds, the biggest monthly increase since May.

The coronavirus lockdowns and an emergency tax cut for buyers due to expire in March increased housing demand, propelling the British housing market to top shape amidst the coronavirus crisis. This comes in contrast to the slowing growth of the British economy and rising unemployment figures.

BoE data also reflected consumer lending dropping by 590 million pounds on the month, critically due to repayment of credit card debt. On a yearly basis, consumer lending dropped 5.6%, its biggest decline in the history of its recording since 1994.

Aside from a second wave of the coronavirus spread, a pending trade deal between Britain and the European Union is negatively impacting the U.K.’s economy.