The Bank of England’s mortgage data for April has shown that mortgage approvals have continued to fall.
The number of loans approved for house purchase (107,000), those for remortgaging (98,000) and those for other purposes (72,000) were all lower than in March.
Hometrack risk and economics director Gary Styles says: “The latest Bank of England mortgage data for April provides further support to Hometrack’s view that the housing market is at a turning point. Total mortgage approvals have now fallen for 2 months running and are 0.7 % below last year’s level. In addition the house purchase element of mortgage approvals has now fallen for 3 months in a row and has shown no overall growth in the last 12 months.
Styles adds: “We can now confidently say that the last 4 interest rate increases are changing the tone and outlook for the mortgage and housing market. With interest rates likely to rise again in the next few months we expect to see total mortgage growth to slow to 10% by the end of the year from around 11.4 % in April.
“The UK housing market appears to be at a major turning point with house price growth slowing, mortgage lending easing and signs that labour market tightness is beginning to abate. It now looks likely that the housing market will start 2008 with far less bounce and vitality than in recent years and talk of even higher interest rates will do little to improve consumer expectations.”