In a recent report the Bank of England has confirmed that the level of new mortgage approvals fell again in December, making the seventh month in a row where mortgage approvals have fallen. According to the figures the number of new mortgage approvals fell from 81,000 in November of last year to 73,000 in December.
Experts have stated that the falling figures are a sign of the weakening housing markets coupled with tighter credit conditions that have come about as a result of the global credit crunch.
Affordability is another issue, with fewer and fewer people in the first time buyer market able to afford to get onto the property ladder.
One official from the Royal Institute of Chartered Surveyors stated: “At the start of 2008, first-time buyers are finding it even harder to get a foothold on the housing ladder and the signs are that conditions are unlikely to get better in the short term. Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect.”
Another analyst stated: “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 report indicates that the average homeowner did find it a little easier to keep up with mortgage repayments in the last quarter of last year, with one official stated: “Those who are struggling with mortgage repayments are still faced with paying a large percentage of take-home pay but there may be some release of pressure as earnings continue to rise. If the Bank of England cuts interest rates next week, many will breathe a sigh of relief.”
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