Thursday, 27 December 2007

Mortgage approvals down 43 percent.


The British Bankers Association had a nasty post-christmas surprise for the property market. New mortgage lending dropped by 43.5 per cent last month compared with last November. UK banks lent just £4.3 billion to homebuyers last month, £500 million less than October, more than £1 billion below the average over the previous six months.

There is a simple chain reaction at work here; no mortgage lending means no demand for housing. No demand means falling house prices.

4 comments:

Josh said...

YIKES - 43 percent down compared to last year. The UK property market is dead. What a start to 2008!

speedtheplow said...

It only means falling house prices if people decide to sell. What if they just sit tight?

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01/20/2009 end of an error said...

Speedtheplow,

People have life changes that necessitate sells divorce,death,job loss,etc. These necessary sells set comps and bring surrounding property values down.