The Bank of England's official figures reveal that in December there were 113,000 loans approved for house purchase, down 12.4% on the 129,000 approved in November.
The December figure is lower than the average 124,000 of the prior six months and is the slightest total recorded since April 2006.
Mortgage approval statistics are important in indicating future activity of the housing market with these numbers suggesting that recent interest rate rises are beginning to take effect.
A recent Nationwide report also shows a slowdown in the rapid pace of house price growth. House price values went up by only 0.3% in November, the tiniest monthly increase since May 2006.
The slowing down in the house price growth rate adds to the increasing list of property market cooling indicators, so the Nationwide states. Estate agents reported a slight easing of housing demand in December and January.
The slightest increase in house prices in eight months, as well as a decrease in the number of mortgage loans all bespeak that the property market is feeling the impact of higher interest rates.
Estate agents are indicating that the heat is coming out of the property market. This slowing down of the housing market is likely to carry on as first time buyers struggle with higher mortgage costs .
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Lending for House Purchases Down
Wed, 31 Jan 2007
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