Belfast Telegraph

Mortgage approvals drop reflects concerns for future

By Vicky Shaw

The number of mortgage approvals being made to home buyers fell to a six-month low in March, Bank of England figures show.

Some 66,837 loans were approved for house purchase across the UK, marking the lowest monthly total seen since September 2016.

It is the second month in a row that the number of mortgages getting the go-ahead has edged downwards, with February also seeing a decline.

Howard Archer, an economist at IHS Markit, said: "March's second successive drop in mortgage approvals to a six-month low reported by the Bank of England adds to the evidence that the housing market is being increasingly affected by the increasing squeeze on consumers and their concerns over the outlook."

He suspected that consumers are likely to be increasingly concerned about making major spending decisions amid rising living costs and high house prices compared with earnings.

However, Mr Archer said that a shortage of homes for sale is likely to put a "floor" under house prices, with property values expected to increase by 2% across 2017.

The National Association of Estate Agents (NAEA) recently reported that the number of properties available to buy decreased across the UK to an average of 39 per branch in March, from 44 in February.

March's average figure was the lowest the NAEA has seen for that month since its records started in autumn 2002.

Meanwhile, there have also been signs of a mortgage price war, with some lenders launching their lowest ever rates in recent weeks.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders remain keen to attract mortgage business, from first-time buyers, home movers and those re-mortgaging.

The Bank's figures also show consumer credit, which includes borrowing using credit cards, personal loans and overdrafts, recorded annual growth of 10.2% in March, a slower pace from a 10.5% annual increase in January and February.

Belfast Telegraph

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