Mortgages in November the lowest for over a year

 

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(qlmbusinessnews.com via bbc.co.uk – – Thur, 28 Dec 2017) London, Uk – –

The number of households taking out new mortgages in November was the lowest for over a year, according to official figures.

UK Finance said High Street banks approved 39,507 mortgages during the month, the lowest since August 2016.

The figure represents a 5% fall on the same month a year ago.

November was the month when the Bank of England announced its decision to increase base rates to 0.5%, the first rise in a decade.

Howard Archer, chief economic adviser to the EY Item Club, said housing market activity may have taken a dent as a result of the Bank of England move.

“While the increase was only 0.25%, and mortgage rates are still very low, there may have been a significant impact on potential buyers’ psychology,” he said.Many banks also increased the cost of fixed-rate mortgages before the announcement, which may have discouraged some buyers.

But mortgage rates remain at historically low levels.

Towards the end of November Stamp Duty was abolished for first-time buyers on properties worth up to £300,000.

So it is possible that the number of mortgage approvals may recover once December’s figures are published.

Mr Archer added that 2018 would be a very challenging year for the housing market, with activity likely to be “lacklustre” and house price rises limited to around 2%.

By Brian Milligan