Bank of England data: Mortgage approvals down in April
New Bank of England data shows that mortgage approvals were at their lowest level in a year in April, the third month in a row that fewer new mortgages were given the go-ahead. There were 107,000 mortgage approvals in April, compared to 111,000 in March. Buyers borrowed £8.9 billion more in the month, the smallest gain since September and much less than had been anticipated.
Rising interest rates are being blamed for this new reticence to borrow. Rates have risen four times since last August and are widely expected to rise again before this August, with some analysts saying that the Bank of England rate could go to 6 percent by the end of the year. The rate rises have already cooled credit card spending in the UK and are expected to cool the housing market as well, slowing the steady rise in house prices.
It is unclear, however, when house prices will begin to slow their climb. Nationwide’s latest survey shows that price growth in May was in double digits. One analyst says that as long as there is a shortage of properties available, prices will remain propped up. While there have been more houses come on the market recently due to the expectation that Home Information Packs would be required from 1 June, there is still a relative shortage in the market. The delay of HIPs until 1 August could mean that fewer houses will be offered for sale in the short term, keeping prices on the rise.
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