Weak housing loans point to a price slump

first_img whatsapp Show Comments ▼ KCS-content Weak housing loans point to a price slump Tuesday 31 August 2010 8:51 pm Share JUST 48,700 mortgages were approved in July, according to data published yesterday by the Bank of England, raising fears that the UK housing market is at best drifting sideways and at worst heading for a double-dip recession.Although the small rise was better than the dip to 46-47,000 that the market had expected, economists were extremely pessimistic about the outlook for the British property market. They pointed out that approvals are still well below the average of 93,000 per month over the past decade.Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said: “The figures provide further confirmation that the housing market is heading for a double dip, with net mortgage lending pretty much flat and the number of mortgage approvals remaining very low.”“The figures for mortgage approvals, a proxy for activity, tend to be well correlated with prices and the latest figures clearly point to falling prices over the second half of this year and into 2011, particularly now that supply shortages have eased,” Goodwin added.Economists pointed to subdued demand for housing caused by high unemployment levels – which could rise further once public sector spending cuts come into effect – as well as poor household income growth and affordability.Although the interest rates are at record lows, these are not being fully passed on to borrowers, who must meet more stringent lending criteria.Simon Rubinsohn, chief economist at the Royal Institution for Chartered Surveyors (RICS) said: “A lack of mortgage finance remains a key problem for many borrowers looking to take their first step on the property ladder, with the high deposits required still proving to be an obstacle for many. Uncertainty over the outlook for the market may also be discouraging would be buyers.”The poor approvals data adds to a string of cheerless figures for the UK housing market both in terms of house prices and mortgage lending. Only last week, the British Bankers’ Association data showed no change in net mortgage lending in July on the previous month. The impact will be felt in tomorrow’s Nationwide August data. Tags: NULL whatsapp More From Our Partners 980-foot skyscraper sways in China, prompting panic and evacuationsnypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comA ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgBiden received funds from top Russia lobbyist before Nord Stream 2 giveawaynypost.comNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orglast_img

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