Number of mortgage approvals made to home buyers falls to seven-month low
The number of mortgage approvals made to home buyers has slipped back to a seven-month low, as experts said the housing market is feeling the impact of an “unappetising cocktail” of uncertainties.
Some 41,219 mortgage approvals for house purchase got the go-ahead in October, according to data from trade association UK Finance.
It was the lowest monthly total since March.
The figures were released as a separate report from NAEA (National Association of Estate Agents) Propertymark said both the supply of homes on agents’ books and the number of house hunters fell back in October.
Experts said uncertainties stemming from the General Election and Brexit are causing would-be buyers to hesitate – and on top of this there is usually a seasonal slowdown in the housing market as people’s focus turns to Christmas.
Commenting on UK Finance’s figures, Howard Archer, chief economic adviser at EY ITEM Club said: “The housing market is currently faltering amid an unappetising cocktail of Brexit, economic and domestic political uncertainties.”
He continued: “It looks a racing certainty that the housing market will continue to find life challenging in the near term at least, keeping prices soft.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the latest total “likely partly reflects would-be buyers deferring purchases until the political outlook becomes clearer”.
Low mortgage rates should help to support the figures, he said.
Mr Tombs said: “The recent sharp decline in mortgage rates has made home-ownership much more attractive.
“The average quoted rate for a five-year, 75% LTV (loan-to-value) loan fell to 1.74% in October, from 1.80% in September.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Until the General Election result and Brexit are settled, it looks unlikely that the lack of confidence this is instilling in the market will change.”
Mark Hayward, chief executive, NAEA Propertymark, said: “Brexit is undoubtedly causing uncertainty in the housing market, which in turn affects sentiment and decision-making.
“On top of both a Brexit deadline and a looming General Election, we’re also entering a quieter period seasonally, where we typically see the market slow down as people put their moving plans on hold until the new year.
“Once the General Election has passed, and there’s clarity on how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity in the new year.”
