Recently, there have been a string of new numbers pointing to a weakening UK property market. The latest was mortgage approvals. On a seasonally adjusted basis, approvals in December fell. Year on year, the flow of new credit to the housing market is down about £2 billion. That is a big number. In December 2009, monthly mortgage approvals were running at £8 billion; in December 2010, the number was just £6 billion.Banks are again tightening credit. A new and more gentle credit crunch seems to be underway. It is less dramatic that the post-Lehman crunch. Nevertheless, it points to a further near term weakening of property prices.
6 comments:
Nice chart, but I think the first decline started a little earlier than you suggest.
The total annual lending created by all the funny instruments was three times what the real economy could stand; property prices tripled; now lending on property is only a third of what it was.
What does that tell us about where real property values are headed?
-back to a third of the 2007 maximum!
anon 16.23
Yeah I like the sound of that. One third.....
Surely that's not 'mortgage approvals', that's net lending, which at the peak was £200 billion a year or something insane.
In Jan 2006 for example, gross lending was £23 bn and net lending was £4.6 bn (in one month alone!)
Oops, delete that £200 billion figure, call it £100 billion over a year or something.
Or is your chart monthly figures for gross lending?
confused.com
Monthly approvals. I will post the table reference shortly.
alice
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