Bank figures show mortgage approval decline
Published: 29-Nov-2007
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New figures from the Bank of England show that mortgage approvals fell significantly during October.
The number of approvals fell from 100,000 in September to 88,000 in October, while the six-month average is 109,000.
Total net lending secured on properties was down to £7.3 billion, the lowest level since July 2005, and well below the £9.0 billion six-month average.
On top of this, remortgages were down from 98,000 in September to 87,000 in October - further evidence of a slowing housing market.
"Slowing housing demand is expected to steadily feed through to dampen house prices over the coming months," said Global Insight economist Howard Archer.
"Consequently, we expect annual house price inflation to fall back markedly over the next few months."
He said that the decision by the Bank's monetary policy committee (MPC) on whether or notto cut interest rates in December looks "balanced on a knife edge".
Simon Rubinsohn of the Royal Institution of Chartered Surveyors added: "Today's data will strengthen the hand of the doves of the MPC ahead of next week's meeting and could just swing the balance in favour of an early cut in interest rates.
"This would provide some welcome relief particularly for first time buyers who are feeling the full force of the credit crunch as lenders become more discriminating in their lending activity."
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