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Financial Mirror (Cyprus) - - FRONT PAGE -

The slow­down in the U.K. house mar­ket has con­tin­ued after Bank of Eng­land fig­ures showed another dip in the num­ber of home buyer mort­gages, ac­cord­ing to me­dia re­ports.

Ap­provals of loans for house pur­chase dropped for the fourth month in a row to 59,426 in Oc­to­ber, the low­est level since June last year and a 22% de­cline from the re­cent peak of 76,574 in Jan­uary, the Press As­so­ci­a­tion re­ported.

Mort­gage lend­ing and hous­ing de­mand have been slow­ing since the sum­mer amid tighter mort­gage mar­ket reg­u­la­tions, a short­age of homes on the mar­ket and re­cent fears over when in­ter­est rates will rise.

How­ever, Cap­i­tal Eco­nomics prop­erty ex­pert Matthew Poin­ton said there were rea­sons to think that this dip will not last for much longer.

He said mort­gage in­ter­est rates have started to fall on the back of ear­lier de­clines in whole­sale rates as ex­pec­ta­tions for when the BoE will start to raise rates have moved fur­ther into the dis­tance.

“Cou­pled with ris­ing em­ploy­ment and the im­mi­nent re­turn of real earn­ings growth, con­sumers are the most con­fi­dent in mak­ing a ma­jor pur­chase since mid-2007. That sug­gests lend­ing vol­umes are set to rise,” Poin­ton added.

Mean­while, the BoE recorded a GBP 1.1 bln in­crease in bor­row­ing us­ing credit cards, per­sonal loans and over­drafts in Oc­to­ber, up from GBP 942 mln in Septem­ber.

This was the fourth suc­ces­sive month of un­se­cured con­sumer bor­row­ing of around GBP 1 bln and took the av­er­age for the year to date to GBP 881 mln.

Howard Archer, chief UK economist at IHS Global In­sight, said this was up from an av­er­age monthly in­crease of GBP 631 mln in 2013 and GBP 159 mln in 2012.

“Markedly im­proved con­sumer con­fi­dence means that peo­ple have be­come more pre­pared to bor­row in re­cent months. It also may well be that a sig­nif­i­cant amount of peo­ple are bor­row­ing more due to the squeeze on their pur­chas­ing power com­ing from ex­tended low earn­ings growth,” Archer said.

Bor­row­ing on credit cards rose to a six-month high of GBP 373 mln in Oc­to­ber.

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