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All time low for UK Mortgage Approvals

05/06/2008

Yet another indication that the UK housing market is taking it’s toll on the economy as the number of mortgages being approved in the UK has reached an all time low two months in a row.

There were 64,000 mortgages approved in March and economists had expected a little increase to around the 65,000 mark. The central bank has been collecting this data for fifteen years and the number of mortgages approved in April (58,000) was the lowest that had been recorded.

"Elevated affordability pressures on potential house buyers stem from high house prices and modest real disposable income growth, while still tight credit conditions are leading to significantly fewer and more expensive mortgages being available," Howard Archer, Chief UK and European economist at Global Insight said.

He also said that the housing market was facing pressures from a number of factors including affordability stretched to the maximum and tighter lending conditions.

Simon Rubinson, Chief Economist from the Royal Institution of Chartered Surveyors said “A collapse in transactions of this magnitude has major implications both for consumer spending and a wide range of ancillary industries,"

"Although a supportive response from the Bank is improbable in the near term, the persistence of such a trend could force the hand of the authorities as autumn approaches."


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