Mortgage approvals drop in June
30th July 2010
Bank of England figures have revealed a drop in mortgage approvals last month as fears resurfaced over the fragile state of the property market and the wider economy.
During June 47,643 loans were approved, this fell below the average for the past six months of 50,036 and was down 4% on May.
The drop in approvals was revealed as Nationwide showed a decline in the number of potential new buyers during the month resulting in house prices falling 0.5% for the first time since February.
More properties have come on to the market since the Government scrapped home information packs, but buyers are much thinner on the ground as confidence is sapped by unemployment worries as well as austerity measures to tackle the deficit.
And with public sector cuts the economic outlook remains uncertain and the benefits of having income protection cover in place are evident.
Wider credit conditions have tightened in recent months due to sovereign debt fears in Europe, threatening a further blow to the health of the banking sector.
IHS Global Insight economist Howard Archer said mortgage approvals were "well below" the 70,000-80,000 level consistent with stable house prices.
Copyright © Press Association 2010
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