Mortgage approvals fall, house sales down

| October 31, 2011
”Mortgage

The Bank of England has today revealed mortgage approvals fell in September for the first time in six months.

According to the Bank, there were 50,967 loans approved in the month – down 3% on August’s figure.

However, September’s figure was broadly in line with forecasts and suggests the UK mortgage market will remain subdued for some time to come.

Approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

In other news today, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in September in the UK.

According to HMRC, 72,000 homes worth at least £40,000 or more were sold in the month – the second consecutive monthly decline and way below the July peak of 83,000.

At the height of the housing boom in July 2007, 151,000 homes were sold.

Commenting on the figures, Howard Archer of IHS Global Insight, said: “September’s retreat in mortgage approvals reinforces belief that there is little evidence of any significant step in housing market activity.”

Mr Archer also believes that house prices are likely to fall in the coming months as a result of rising unemployment and increasing uncertainty surrounding the economy.

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