Mortgage approvals fall to 11-month low as housing market cools down
The total value of new mortgages for house purchase in the month fell to £10 billion
Mortgage approvals fell to an 11-month low in May, confirming that the lending market was already losing some steam before the Bank of England announced new curbs last week.
The Bank reported today that there were 61,707 mortgage approvals in the month, an 18.7 per cent decline from their recent peak in January and the lowest monthly figure since June 2013.
This is the fourth-consecutive month that the volume of mortgage approvals — the earliest stage in the house-purchase process for many buyers — has fallen.
The total value of new mortgages for house purchase in the month also fell to £10 billion, down from £12 billion in January, although mortgage lending net of repayments was slightly stronger than analysts had expected at £1.98 billion.
Last week the Bank’s Governor, Mark Carney, pictured, said forecasts for rising household mortgage debt were a “concern” as he unveiled new official restrictions on the proportion of high loan-to-value mortgage loans banks can make each quarter.
The Bank also tightened up the interest-rate stress tests that lenders must impose on borrowers before a loan is granted.
Some analysts argue the trend of declining volume of mortgage approvals is a sign the mortgage market review controls imposed in April are already curbing loan growth and that the Bank’s additional restrictions last week are unnecessary.
However, Paul Hollingsworth of Capital Economics predicted today the volume of mortgage approvals will soon start growing again.
“We expect mortgage lending volumes to stage a gradual recovery in the second half of this year” he said.
Average house prices rose 9.9 per cent in the year to April according to the Office for National Statistics, with gains seen in every region. However, more up-to-date house-price indexes have pointed to a moderation of growth in the wake of the introduction of the MMR.
Figures from the British Bankers’ Association last week also showed the lowest number of mortgage approvals since August 2013.
Elsewhere, a survey by Citigroup today showed public expectations for inflation over the next five to 10 years edging lower to 3 per cent in June from 3.1 per cent in May.
Expectations of price increases over the next year, however, were unchanged at 2.1 per cent. The official reading for consumer price inflation was 1.5 per cent in May.
- 1 Planes go hybrid-electric in important step to greener flight
- 2 Antonio Martin shooting: Police and protesters clash over teenager's death just five miles from Ferguson, Missouri
- 3 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
- 4 Hip hop is both racial and political, and for Iggy Azalea to suggest otherwise is insulting
- 5 Man hospitalised with pneumonia after downing eggnog at office Christmas party
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...