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Mortgage approvals stay subdued
Tue, 07 Feb, 2012
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Mortgage approvals stay subdued
Tue, 31 Aug 2010, 09:37:00
Demand for mortgages and other forms of credit remains subdued despite a small increase in the number of loans advanced in July. The number of loan approvals for house purchase rose slightly to 48,722 from June's figure of 48,562 and the previous six-month average of 48,546, the Bank of England said. Approvals for remortgaging (26,951) were up on June and also higher than the previous six-month average (26,235), but the totals lent fell sharply. Net mortgage lending tumbled to £86m in July, down from £518m in June and well below both the monthly average of £0.8bn for the previous six months and also for the average for this time of year. "It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector," economist Howard Archer at Global Insight said. "Consequently, a further drop of around 5% in house prices looks highly possible in 2011, although much will depend on mortgage availability and the amount of houses coming on to the market. Therefore, we believe that house prices could be some 8-10% lower by end-2011 compared to their mid-2010 levels," he added. Other lending figures from the Bank of England also showed the current cautious mindset of consumers and companies. The Bank's broadest measure of money supply, M4, was unchanged on the month, the weakest reading since January, while consumer credit rose by £173m month-on-month after a fall of £59m the previous month. The average increase over the past six months was £163m. Credit card lending increased by £0.2bn, in line with the previous six-month average; other loans and advances remained stable, also in line with the previous six-month average. The annual growth rate of consumer credit rose by 0.2 percentage points to 0.2% and the three-month annualised growth rate rose to 0.9%.
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