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Mortgage approvals hit all time low for 12 month period

2/05/2007

Latest UK mortgage news shows that mortgage approvals dropped to its lowest levels in the last 12 months since March. Figures suggest that mortgage lenders approved 111,000 applications for mortgages for residential purchase. This figure reflects the lowest level since April 2006.

According to supporting evidence from a Hometrack Ltd report, it has also highlighted that recent interest rate increases in the last year have most definitely had impact on the housing market, which is apparent through the decline in number of mortgage applications. In addition, with expected interest rate rise in the near future the UK market could be hit further with additional costs and not to mention the increase in debts.

Howard Archer, economist at Global Insight said,”Housing market activity is beginning to slow because of higher interest rates and elevated house prices''.

Predictions suggest that the Bank of England is likely to increase interest rates by a further quarter per cent which will take inflation accelerated to a 10 year high.