Mortgage approvals still falling in the UK

December 20, 2008

The slump in sales has led to a glut of homes available to rent
Mortgage approvals dropped again in October, suggesting that house sales and prices have further to fall.

Bank of England figures show that just 32,000 mortgages were approved, 1,000 fewer than in the previous month.

The number of mortgages approved, but not yet lent, is a good indicator of medium-term trends in lending.

The UK housing market has already seen prices fall by between 10% and 15% in the past year, with sales down by more than half.

"An extremely weak set of Bank of England mortgage approvals and lending data suggest that house prices still have a long way to fall," said Howard Archer, chief UK economist at IHS Global Insight.

"Housing market activity is exceptionally low compared to long-term norms."

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