Last month saw the lowest point for the number of mortgage approvals for over a year and a half. The Bank of England recently released figures which showed that the housing market is in one of its weakest states for a long time. In June there were around 45,000 mortgages approved for houses which was the lowest point over two years. On a year by year basis, this was a 10 percent decline on the number of approvals for the previous year.
Interestingly, the number of people paying off secured loans has increased ahead of the number of people borrowing for the first time since mid last year. It is estimated that the number of people taking out secured loans has fallen to its lowest point of increase in roughly 2 years.
The chief economist at HIS Global Insight is Howard Archer and he has recently stated, “These figures don’t just tell us that people are finding it more difficult to secure a mortgage, but it also shows that the activity in the housing market is very limited. We saw a number of people trying to take advantage of the stamp duty relief which was seen at the beginning of the year, and now we are going to see a sharp decline as people are no longer able to save on this tax relief.”
In June the number of people taking advantage of consumer credit increased by over £600 million, which is a decrease on the same amount borrowed in May and this indicates that people are struggling to meet their various financial commitments. The government recently launched a large fund for encouraging lending in the country.