Mortgage approvals in April fell for the fourth consecutive month this year to 58,000, according to the Bank of England.
April’s figure is 5,000 lower than in March and 17,000 lower than the previous six month average, the BoE says.
The total value of net lending secured on property increased by £6.4bn in April, again marking the fourth consecutive month in which this figure has fallen.
Although the number of mortgage approvals for house purchases was down, the number of remortgage approvals increased from 98,000 to 106,000 in April, amounting to a £14.1bn increase in value since March.
Simon Rubinsohn, chief economist at RICS, says mortgage approvals had roughly halved since this time last year.
“This highlights very clearly the real problem facing not just the property market but also the wider economy,” he says.
“A collapse in transactions of this magnitude has major implications both for consumer spending and a wide range of ancillary industries.
"Although a supportive response from the Bank of England is improbable in the near term, the persistence of such a trend could force the hand the authorities as autumn approaches.”
Gary Styles, strategy, risk and economics director at Hometrack, adds mortgage growth will slow considerably by the end of 2008.
“With mortgage interest rates still expected to remain high for riskier loans, we anticipate that total outstanding mortgage growth will slow to around 5.7% by the end of 2008, from around 10% in 2007," he says.IFAonline
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