It is getting harder and harder to keep up the facade of optimism about the UK housing market. Today, the market was rocked by two further data releases that pointed towards a slowing housing market.
The Council of Mortgage lenders reported that new mortgage approvals fell by 12 percent. Obviously, the banks and building societies are becoming increasingly nervous about the repayment capacity of their latest customers.
Then it was the turn of the building societies to provide the bad news. Mortgage lending is down sharply.
The direction of the housing market is now set. The crash is firmly underway. Lending is slowing, and prices will fall. As the old song goes "we've only just begun....."
Read all about it in the business section of the Times.
New mortgage approvals plummet by 12%
The British housing market is losing its buoyancy as rising interest rates and the liquidity crisis depress mortgage lending Dearbail Jordan The rate of new UK mortgages being granted plunged by 12 per cent during September, adding to growing evidence that the booming housing market is finally running out of steam.
The Council of Mortgage Lenders (CML) said today that the 12 per cent decline in lending, to £30 billion, was above the typical decline expected between August and September when the amount of home loans normally falls by 5 per cent. The figure includes re-mortgaging as well as new home loans.
Although lending in September rose by 2.5 per cent compared to the same month last year, the CML said it was the smallest increase in two years. The Building Societies Association concurred with the CML's findings, that mortgage lending had fallen, but said the rate had declined year on year, plunging by 10 per cent from £4.8 billion to £4.3 billion.