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Mortgage approvals fall amid subdued demand
Wed, 08 Feb, 2012
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Mortgage approvals fall amid subdued demand
Tue, 24 Aug 2010, 09:21:00
Demand for mortgages remains subdued despite a greater availability of properties and slowing house price growth, the British Bankers' Association (BBA) said today as it reported a fall in the number of mortgages approved in July. Just 33,698 mortgages were approved in July, down from 34,575 the previous month and below the average monthly figure of 35,175 for the half year prior to June. 'Gross mortgage lending remains stable, although demand for mortgages continues to be subdued,' said BBA statistics director David Dooks. 'The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.' House prices have eased recently, giving up some of the gains they posted as the market recovered from the downturn of 2008 to 2009. Last week, data from property website Rightmove showed that asking prices for newly-marketed homes fell by 1.7% in the UK this month after supply hit its highest for any August in three years. The easing in house prices appears to be in line with increased nervousness among Britons as the coalition government prepares deep public spending cuts to deal with the deficit accumulated during the economic crisis. Economic worries have also led to lower consumer demand for credit, which contracted by 2.2% over the year, according to the BBA. Personal deposits have risen 4.8% over the past year. 'Consumer credit outstanding continues to reflect high repayments together with pressure on household finances and job uncertainty,' said Dook. John Velis, head of capital markets research EMEA at Russell Investments, said that the growth in personal deposits was not surprising. 'The credit crunch of 2008 was essentially a "balance sheet recession" brought about by an extended period of excess leverage and its subsequent collapse,' he said. 'Households are having to repair balance sheets, and amidst an uncertain economic outlook are opting to save rather than borrow or spend.'
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