BoE: Mortgage approvals slump in December
The Bank of England has today revealed mortgage approvals slumped in December – to the lowest level since March 2009 – when the economy was in the midst of recession.
According to the Bank, there were 42,563 loans approved in the month, down from November’s 47,287 approvals.
December’s figure was also way below analysts forecast of between 46,000 and 47,000 approvals.
However, traditionally December is one of the quietest months for the housing market as people focus on Christmas.
Today’s figures suggest the housing market will remain subdued throughout 2011 as demand for housing is expected to stay weak as a result of the uncertainty surrounding the economy and the Government’s massive spending cuts.
Last week, the British Bankers’ Association (BBA) revealed a further fall in the number of new mortgages approved by the major banks in December.
According to the BBA, the number of new mortgages approved in the month fell to 28,726, down from 29,696 in November – representing the lowest figure since January 2009.
The Council of Mortgage Lenders (CML) also reported mortgage lending remained weak in December.
In related news today, the Nationwide Building Society revealed a 0.1% fall in house prices for the month of January compared with December.
The latest fall means house prices are now 1.1% lower than this time last year with the average UK home costing £161,600.
According to Nationwide’s chief economist Robert Gardner, the outlook remains uncertain and the lack of buyers, together with the ongoing lack of mortgage availability, means house prices are likely to continue to slide.