Mortgage approvals lowest for 12 months.
The number amount of borrowing approved in August fell to the lowest level in more than a year.
The Bank of England confirmed in its most recent lending publication that approvals fell from 47,000 to 45,000 for the month of August 2010.
The number of mortgage approvals has fallen sharply since the start of the year. It is understood the stamp duty holiday last year had an adverse effect this year with buyers purchasing before the end of the sale.
Recent surveys of house prices have pointed to slowdowns or falls in prices. The Royal Institution of Chartered Surveyors’ surveyed the number of inquiries by potential buyers. This indicated a lower demand in August compared to the previous twelve months.
However there was an increase in the number of and values of property prices at auction. This could lead to higher prices next year.
It is debatable whether the situation will change later in the year. Banks are coming under increasing pressure.they have been accused of profiteering. the margins on tracker rate mortgages is now at its highest level in five years. This indicates that banks are increasing their profits and hence the value of their balance sheets at the expense of customers.
Meanwhile savers are left having to search around for the best deposit rate available. Ironically the banks are penalising savers and borrowers. Savers struggle as Inflation is higher than most interest and borrowers will feel the pain over the next few years as the base rate reverts back to a more normal level.
The Bank of England is aware of the situation, but whether it will change in the short term, probably not.
Your home may be repossessed if you do not keep up repayments on your mortgage