Mortgages plunge to 18-month low

Published by 24publishing for 24dash.com in Housing and also in Finance

Mortgage approvals for house purchase fell to an 18-month low in June, according to the Bank of England.

A total of 44,192 new loans were approved by lenders during the month, down from 50,544 in May and down from 49,236 a year ago.

It was the lowest figure registered since December 2010 when 42,609 were recorded.

The Bank warned the extended bank holiday around the Jubilee may have had an impact on homebuying.

The data shows mortgages hit a 24-month high in January 2012 when 58,183 approvals were recorded - thought to be caused by home buyers rushing to complete their transactions before the end of the stampy duty holiday in March.

The number of approvals for remortgaging fell to 24,117 in June and was lower than the previous six-month average 29,912.

Data from property analysts Hometrack, released today, shows that house prices have fallen for the first time in seven months declining by -0.1% over July with evidence suggesting that the housing markets of London and the South East are starting to slow as demand weakens and supply rises.

Richard Donnell, director of research at Hometrack, said: “House prices are particularly sensitive to changes in levels of demand and during the first four months of the year there was a strong rise in the number of buyers registering with agents - especially in Southern England - and with this came price rises. Now, however, demand is starting to falter across the board. The seasonal downturn has begun and this combined with a weakening economy is impacting on demand for housing.

“Weaker demand is to be expected over the summer months but compared to previous years, the seasonal slowdown has started earlier and developed more rapidly than in previous years. This reflects growing concern over the UK’s economy and the deepening Eurozone crisis.”