Slowdown for mortgage approvals in run-up to Christmas
The latest figures from UK Finance suggest that mortgage approvals fell to a new low in November, as potential homebuyers held back ahead of the festive season.
According to data, high street lenders approved a total of just 39,507 mortgages throughout the course of the month – representative of a five per cent year-on-year fall.
Critics have been keen to point out that overall lending was down to its lowest since August 2016 – and that the Bank of England’s (BoE) decision to increase interest rates at the beginning of the month had an adverse effect on the market.
On 2 November 2017, the Bank rose its base rate from 0.25 per cent to 0.5 per cent – the first increase announced since 2007.
Howard Archer, a prominent Chief Economist, suggested that the move had a negative impact on the “psychology” of potential buyers.
“Housing market activity remains under pressure from squeezed consumer finances and fragile confidence, and it may well have taken a further dent in November from the Bank of England lifting interest rates,” he said.
“While the increase was only 0.25 per cent, and mortgage rates are still very low, there may have been a significant impact on potential buyers’ psychology.”
Other commentators have suggested that the number of mortgage approvals may recover once data for December has been revealed.
This is because a landmark move in the Autumn Budget saw Stamp Duty Land Tax (SDLT) abolished for first-time buyers on properties worth up to £300,000.