GAGE approvals reached an eight-month low in October, according to official data released yesterday.
The Bank of England’s lending figures showed that only 47,185 mortgages were approved. A healthy UK housing market would record closer to 80,000 mortgages per month.
The news pours more misery on the housing market, after recent figures showed a similar decline.
On Sunday the property website Hometrack reported a 4.3 per cent fall for November in the number of new buyers registered with agents.
Their survey also showed a fall in house prices for the fifth consecutive month, as prices dropped by 0.8 per cent on October.
And last week the British Bankers’ Association (BBA) announced a 19-month low in mortgages approvals for October, mirroring the Bank’s figures.
“House prices will trend down to lose around 10 per cent from their peak 2010 levels by the end of 2011,” said Howard Archer of IHS Global Insight.
However, the data held some positive news, as net mortgage lending increased to £1bn from £0.2bn. And according to Richard Sexton of chartered surveyors e.surv, this reflects a tiered housing market in which wealthy people are continuing to buy.
“Approvals are actually up for the most expensive properties,” he explained. “Wealthy buyers are using large deposits to side-step lending restrictions.”
The Bank also revealed that consumer credit picked up in October, rising to £287m from £72m in September. While the rise appears positive, it had been forecast by economists and is still well below long-term levels.