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Highlights:
- The latest data from the Bank of England has shown that mortgage approvals dropped by 10% last month.
- This is the lowest number of approvals by British lenders since June 2020.
The housing sector has been one of the most impacted sectors after Kwasi Kwarteng's mini-budget induced turbulence in the country's financial markets. The anticipation of bigger interest hikes from the Bank of England also forced several lenders to reconsider the mortgage deals that they were offering. Most of the deals were pulled out of the market after the disastrous mini-budget in September.
The mortgage rates then started to rise sharply, stabilising only after the country got a new prime minister and chancellor last month. However, besides the higher rates, there's one more challenge that people looking to buy a new home are facing.
The latest data from the Bank of England has shown that mortgage approvals dropped by 10% last month, reaching under 59,000 from 66,000 in the previous month. This is the lowest number of approvals by lenders since June 2020 when the COVID-19 pandemic and lockdown restrictions hit the country. In October last year, this number stood at 69,489.
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The figures come as yet another indication that the UK housing market is witnessing a slowdown. It may be noted that house prices have been settling down for a few months now after rising significantly in the first half of this year.
Let's take a look at some mortgage stocks on the London Stock Exchange and explore their investment prospects.
Lloyds Banking Group Plc (LON: LLOY)
Lloyds is among the leading four UK banks, also known as the Big Four. It is a constituent of the FTSE 100 index, having a market cap of £30,819.61 million. It has an EPS of 0.08, and the 12-month return is 0.32% as of 29 November. The stock traded at GBX 46.14, up 0.71% at 10:51 am GMT on Tuesday.
NatWest Group plc (LON: NWG)
Another Big Four constituent is the NatWest Group. The lender also belongs to the FTSE 100 index and has a market cap of £24,602.16 million as of 29 November. The EPS stands at 0.25. The stock has given a return of 14.44% to investors over the past year. Shares of NWG traded 0.79% higher at GBX 256.60 as of 10:55 am GMT on Tuesday.
OSB Group Plc (LON: OSB)
The FTSE 250 constituent is in the business of providing specialist mortgage services to clients. As of 29 November, it has a market cap of £2,015.00 million, and its stock price has tumbled over 5% over the past year. The EPS presently stands at 0.76. OSB shares traded at GBX 467.00, down 0.51% at 10:57 am GMT on Tuesday.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated, taking into consideration the associated risks.
