U.K. mortgage approvals for house purchase declined for a fifth straight month in November to its lowest level in 18 months, figures from the the British Bankers’ Association showed Tuesday.
The number of mortgage approvals dropped to 36,717 from an upwardly revised 37,153 in October. Economists had expected the figure to ease to 36,400 in November.
The latest figure was the lowest since April 2013, when approvals were 33,484.
“Today’s figures show quite a sharp chill to the housing market in recent months – with house purchase approvals during November 20% lower than a year before,” BBA Chief Economist Richard Woolhouse said.
“It will be interesting to see what impact the stamp duty changes the Chancellor unveiled in his Autumn Statement will have early in the New Year. They could prove a modest stocking filler for homebuyers and estate agents.”
BBA also reported that the annual growth in unsecured borrowing was 3.1 percent, which was the highest rate since late 2008. Deposits grew 3.5 percent annually.
“It’s also striking to see that unsecured borrowing such as personal loans are growing at their fastest rate for six years. This suggests consumers may be feeling more confident which bodes well for a fruitful Christmas for retailers,” Woolhouse said.
Meanwhile, gross mortgage borrowing was 5.5 percent lower than a year ago, but the overall mortgage stock rose by 1.6 percent.
“The BBA data provide ongoing evidence that the housing market is ending 2014 on the back foot. This is also reflected in latest survey evidence with latest the RICS reporting a fifth successive fall in buyer enquiries in November and a fourth successive drop in agreed sales (the first declines since September 2012),” IHS Global Insight economist Howard Archer said.
“While the Stamp Duty reform should have a beneficial impact on the housing market, we doubt it will cause housing activity and prices to see a major turnaround.”
The material has been provided by InstaForex Company – www.instaforex.com