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UK mortgage approvals fall to lowest in 9 months in sign of weakening housing market

UK mortgage approvals fall to lowest in 9 months in sign of weakening housing market

LONDON: Mortgage approvals fell to their lowest in nine months in June signalling a loss of momentum in the UK housing market. There were 64,684 approvals in the month, down from 65,109 in May and the lowest figure since September 2016, according to the Bank of England’s monthly update. “The fundamentals for house buyers are likely to remain weak over the coming months with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth,” said Howard Archer, economist at the EY ITEM Club. Some analysts said uncertainty over Brexit could also hamper the house purchase market. “Approvals look set to decline further in the second half of this year, as lenders tighten the credit taps and households become increasingly cautious about making major financial decisions,” said Samuel Tombs of Pantheon.

Meanwhile, consumer credit growth, which has caused concern among regulators in recent months, fell slightly, according to the latest Bank data. The annual rate of growth declined to 10 per cent, down from 10.4 per cent in May, having peaked at an 11-year high of 10.9 per cent last November. However, analysts said the growth rate remained very strong by historical standards. “This will clearly do nothing to allay policymakers’ fears that unsecured credit is growing too quickly,” said Ruth Gregory of Capital Economics.