One by one, the indicators are starting to flash red. Today, two indicators warned us of a housing market slowdown; mortgage approvals and gross mortgage lending.
The Building Societies Assocation announced that in May mortgage approvals fell by 13 percent compared to the same period last year. Furthermore, the Association also announced that actual lending also dropped in May by 17% compared with the same month last year.
The Council of Mortgage Lenders also had some bad news to deliver. The Council pointed out that although gross lending is increasing month on month, (May's lending of £30.6bn was 12% higher than April's total of £27.4bn), the yearly rate of growth is weakening quickly. In the first four months of this year lending was typically between 12% and 15% higher than the same month last year; in May it was only 5% higher than in May last year.
Looking forward, what do we see; at least one more interest rate hike. The market is beginning to wilt; one more hike should be enough to kill it.