Number of mortgages approved for house purchase lowest since 2013, says report

The number of mortgage approvals being made to home buyers fell to its lowest level in more than four and a half years in December, according to a high street banking report.

Some 36,115 mortgages were approved, marking the lowest figure since April 2013, trade body UK Finance said.

The number of remortgage loans getting the go-ahead stood at 28,460, the lowest in four months.

Howard Archer, chief economic adviser at EY ITEM Club, said housing market activity ended 2017 "very much on the back foot".

He said he expects house prices to rise by a "modest" 2% in 2018.

Mr Archer said: "The fundamentals for house buyers are likely to remain challenging.

"The squeeze on consumers' purchasing power remains appreciable going into 2018, and it is likely to only gradually ease as the year progresses.

"Additionally, housing market activity is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions."

The figures also show annual growth in consumer credit slowed to 0.7% in December from 0.8% the previous two months, with credit card borrowing showing annual growth of 5.3%.

Mr Archer said: "The Bank of England will be pleased with the slowdown in consumer credit in December and will be looking for a continuation of this trend in 2018."

Eric Leenders, managing director of personal finance at UK Finance, said: "December is traditionally a quieter month for mortgages.

"Mortgage rates remain low, driven by a competitive market, so customers should shop around for the best deals."

He said business lending was up year-on-year, "even though December saw the usual seasonal net repayment across all industries and sizes of borrower".

"However, healthy export levels and an uptick in overall business confidence suggest that in this new year, there may be an appetite to capitalise on opportunities for growth supported by continued favourable borrowing conditions."