Mortgage approvals plunge
Monday 30 July 2012
The number of mortgage approvals plunged to an 18-month low last month, Bank of England figures showed today, underlining weak housing market conditions.
The number of approvals for house purchase in June were 44,192, down from a 25-month high of 50,544 in May and falling 10% year-on-year, the Bank said.
The figures also revealed that repayments on secured loans were ahead of new lending for the first time since June last year, leading to the smallest rise in total lending to individuals - £300 million - in nearly two years.
Howard Archer, chief UK and European economist at IHS Global Insight, said the figures showed that "underlying housing market activity is limited" following a jump in first-time buyers looking to complete before a stamp duty concession ended in March.
Lenders are expected to continue a trend seen in recent months of tightening their borrowing criteria and raising their mortgage rates amid the weak economy and the ongoing eurozone crisis, making it tougher for people to take out a mortgage.
The number of approvals for re-mortgaging also fell back in June, to 24,117 loans worth £3.3 billion, down from 28,567 the previous month.
Mr Archer added that the weak figures reinforced a view that house prices are set to fall in the months ahead.
He said: "We expect house prices to end up losing at least 3% from current levels. Furthermore, there is a significant danger that house prices could fall even more than this due to the serious downside risks to the UK economic outlook, both from domestic factors and from the eurozone crisis."
Consumer credit, which includes personal loans, overdrafts and credit cards, increased by £635 million in June, following an increase of £774 million in May.
The Treasury and Bank earlier this month launched an £80 million Funding for Lending scheme, designed to unclog the flow of credit from banks to businesses and households.
But Blerina Urici, economist at Barclays Economic Research, said the new measures would only have a limited impact.
She said: "The success of such measures will depend on the take-up by lending institutions, and with one of the major UK banks announcing it will not take part, the degree of participation remains to be seen."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...