"Some lenders noted that changes introduced as a result of the Mortgage Market Review might reduce approval rates somewhat"
- The Bank of England
U.K. mortgage demand rose significantly this quarter and lenders expect it will advance further in the coming month, the Bank of England said. According to the central bank's Credit Conditions Survey, availability of secured credit to households increased slightly in the period. The survey also showed that new mortgage rules may have an effect on the market, with lenders projecting the first drop in maximum loan-to-income ratios in more than two years.
Separately, on of the most dovish BoE policymakers, David Miles, wrote that a sustainable recovery and inflation below the official goal suggest that monetary policy is approaching normalization, but there is no urgent necessity to hike rates as yet. Meanwhile, fresh data due out this week may show that U.K. economy is expanding at the fastest pace since 2007. The Office for National Statistics will publish its revision of a first-quarter growth, with the research company HIS Global Insight forecasting that the earlier estimate of 0.8% on quarter may reach 0.9%. That would translate into an annualized growth of 3.2%, the most since the last quarter of 2007. GDP growth has been boosted largely by rising activity in the construction sector, with construction output in Q1 now put at 1.5% on a quarterly basis, marking a substantial upgrade from the 0.6% growth currently depicted in the first quarter national accounts.
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