Black Friday 2017

New mortgage approvals slump in December raising fears for housing market

Mortgage approvals by UK banks slumped dramatically in December in response to the newest information from suppliers, elevating contemporary considerations in regards to the path of the housing market.

UK Finance reported that there have been solely 36,115 approvals final month, down from 44,476 in the identical month in 2016 and the bottom since April 2013.

The studying follows a weak report on new purchaser enquiries and agreed gross sales in December from the Royal Establishment of Chartered Surveyors.

“The deterioration in shoppers’ confidence, pushed by the squeeze on actual incomes and the November rate of interest hike, has taken a heavy toll on the mortgage market,” mentioned Samuel Tombs of Pantheon.

“The [Bank’s Monetary Policy Committee] has significantly misjudged the power of the housing market to resist even modest will increase in rates of interest.”

“We anticipate the housing market to stay very weak this yr, with home costs merely holding regular.”

Based on the Workplace for Nationwide Statistics home costs in November 2017 had been up 5.1 per cent on a yr earlier, down from a development charge of above eight per cent on the time of the Brexit vote in 2016.

The most recent studying from the Nationwide Constructing Society confirmed common value development of two.6 per cent in December, down from four.5 per cent a yr earlier.

Lowest since April 2013

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UK Finance additionally reported that Britons put a further £10.1bn on their bank cards in December, with the annual development charge in borrowing at 5.three per cent within the month, unchanged from November.

Nonetheless, total shopper credit score development slowed to zero.7 per cent, down from zero.eight per cent in November and a peak of two.9 per cent in April.

The Financial institution of England has warned in regards to the potential menace to monetary stability posed by the speedy development in shopper credit score in recent times.

“The Financial institution of England might be happy with the slowdown in shopper credit score in December and might be on the lookout for a continuation of this pattern in 2018,” mentioned Howard Archer of the EY Merchandise Membership.


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