British mortgage approvals fell to their lowest level in almost three years in November, as the slowdown in the UK housing market continued apace.
New figures from the Bank of England revealed that approvals fell for the fifth consecutive month, down almost 7 per cent on October, and down more than a quarter on the levels seen in June.
The growth in consumer credit also continued to slow, up just 0.5 per cent on the previous month, as the credit crunch began to take a grip on the unsecured lending market.
Figures from Nationwide also revealed the housing slowdown has begun in all areas of the country, with average property price growth falling in every UK region in the final quarter of 2007. The national average growth in house prices in the final quarter was 1 per cent, compared with 1.6 per cent in the third quarter. Yorkshire & Humberside and Northern Ireland recorded falls in house prices during the last three months of the year, while Durham & Newcastle saw prices fall by 3 per cent over the year.
Howard Archer, the chief UK and European economist at Global Insight, said the housing data would maintain the pressure on the Bank of England to make another interest rate cut sooner rather than later. He added that while he expects house prices to fall by only 3 per cent in 2008, there is a chance the slowdown could be much more severe.
The Bank cut the base rate from 5.75 to 5.5 per cent in December, and Mr Archer said he believed the Monetary Policy Committee would make a further 0.25 per cent cut on Thursday. Some economists believe the Bank will hold off until later in the year.