This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/6707157.stm
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Mortgage approvals hit year low | Mortgage approvals hit year low |
| (about 1 hour later) | |
| The number of new mortgage approvals in the UK fell to a 12-month low in April, Bank of England figures show. | The number of new mortgage approvals in the UK fell to a 12-month low in April, Bank of England figures show. |
| Mortgage approvals totalled 107,000 in April, down from 111,000 in March and the third monthly decline in a row. | Mortgage approvals totalled 107,000 in April, down from 111,000 in March and the third monthly decline in a row. |
| In a further indication of weakening buyer demand mortgage lending rose by £8.9bn, much less than expected and the weakest rise since September | In a further indication of weakening buyer demand mortgage lending rose by £8.9bn, much less than expected and the weakest rise since September |
| Consumer debt rose by only £498m - half what was expected and the smallest increase since March 1997. | Consumer debt rose by only £498m - half what was expected and the smallest increase since March 1997. |
| "The Bank of England will be comforted by today's news which shows its monetary tightening is taking effect," said Thushani Gajasinghe, an economist at the Centre for Economic and Business Research. | |
| "With a further quarter-point rate increase possible in the third quarter, consumer lending may cool further." | |
| Rate pressure | Rate pressure |
| Historically low interest rates in the past few years have encouraged Britons to take on a mountain of debt - now reaching £1.5 trillion. | Historically low interest rates in the past few years have encouraged Britons to take on a mountain of debt - now reaching £1.5 trillion. |
| However, interest rates have risen four times since the beginning of August last year which has begun to put pressure on some households' finances. | However, interest rates have risen four times since the beginning of August last year which has begun to put pressure on some households' finances. |
| Interest rates rose to 5.5% last month and it is widely thought a further rate increase is on the cards before August, and could even hit 6% by the end of the year. | |
| These rate rises are already impacting the consumer's attitude to credit card spending, and are expected to eventually take some of the steam out of the surging housing market and stabilise soaring property prices. | |
| Pricing pressure? | |
| But with double-digit price growth reported by Nationwide for May, analysts remain tentative on calling when a slowdown may occur. | But with double-digit price growth reported by Nationwide for May, analysts remain tentative on calling when a slowdown may occur. |
| Global Insight economist Howard Archer said a general property shortage - particularly in London and the South East - would keep pricing power in favour of the vendor for a little while yet. | |
| But he did point out that significantly more houses have come onto the market in recent weeks as vendors looked to beat the planned introduction of compulsory Home Information Packs (Hips) in June. | |
| "This could well have some dampening impact on house prices in the near term at least, although it remains to be seen how housing supply will be affected by the delaying of the introduction of Hips to at least August," he added. |