Mortgage approvals for house purchase hit lowest levels since January 2015

The number of mortgages being approved to home buyers fell to its lowest levels in around three years in December, Bank of England figures show.

Some 61,039 mortgages were approved for house purchase in December, marking the lowest figure since January 2015, the Bank's Money and Credit report showed.

Remortgaging approvals also fell back, to 46,475 in December, following strengthening in the remortgaging figures in October and November.

Meanwhile annual growth in consumer credit strengthened in December, edging up to 9.5%, from 9.3% in November.

Howard Archer, chief economic adviser at EY ITEM Club, said: "Housing market activity ended 2017 in the doldrums."

He continued: "December's sharp drop in mortgage approvals suggests that already pressurised housing market activity took a further hit from the Bank of England raising interest rates in early November.

"Housing market activity has been under pressure from squeezed consumer finances and fragile confidence."

He said of the growth in consumer credit: "It may be that squeezed households borrowed more in December to enjoy Christmas."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Mortgage approvals plunged to their lowest level since January 2015 in December, signalling that the outlook for house prices and big-ticket household goods purchases has darkened.

"Approvals likely will fall further over the coming months."

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