Mortgage approvals touch a new low
London (Ask4loan) 01 February, 2008: The figures from the Bank of England shows that mortgage approvals for home purchase fell to 73,000 in December 2007, the lowest since 1999. The figures confirm the sharply slowing housing market in the UK. The latest figures from the central bank will put a strong case for further cut in the base rate from its current level of 5.5%.
The mortgage approvals for home purchase fell to 73,000 in December from a downwardly revised figure 81,000 in November, well below the expectations. Ian Kernohan, an economist at Royal London Asset Management, said: "The latest mortgage approval numbers indicate that the current housing slowdown is more pronounced than in 2005. The fallout from the US housing crisis is spreading to the UK via a general squeeze on credit availability and the MPC will seek to offset some of this effect by cutting rates again next month."
The Bank of England figures show that consumer credit also weakened significantly, rising by 557 million pounds in December. The increase was the smallest since April 2007 and half the amount forecasted. Since the credit crunch hit the UK financial markets, the borrowers are facing high borrowing costs on secured loans, personal loans and mortgages. This month, it is very much likely that the relief will come to the homeowners from the Bank of England in the form of first rate-cut of the year.