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Financial Mirror (Cyprus) - - FRONT PAGE -

Mort­gage ap­provals for home buy­ers fell to their low­est level in almost a year-and-a-half in Novem­ber, the Bank of Eng­land has re­ported.

Some 59,029 ap­provals for home loans with a to­tal value of GBP 9.6 bln were recorded for house buys, mark­ing the low­est monthly level since June 2013.

Mean­while con­sumer credit, com­pris­ing bor­row­ing on credit cards, loans and over­drafts, saw the strong­est in­crease since 2008 in the run-up to Christ­mas as shop­pers took ad­van­tage of store pro­mo­tions.

Con­sumer credit in­creased by GBP 1.3 bln in Novem­ber, higher than the av­er­age monthly in­crease of GBP 1 bln seen over the pre­vi­ous six months and the largest up­swing since a GBP 1.4 bln rise in Fe­bru­ary 2008. An­a­lysts said the surge in con­sumers snap­ping up items on Black Fri­day likely con­trib­uted to the high bor­row­ing lev­els.

Within con­sumer credit, credit card lend­ing in­creased by GBP 269 mln in Novem­ber, which is above the typ­i­cal GBP 200 mln monthly up­lift of re­cent months.

Per­sonal loan and over­draft bor­row­ing jumped by GBP 983 mln, which was also higher than the re­cent av­er­age monthly in­crease of GBP 700 mln.

The fig­ures, con­tained in the Bank’s Money and Credit re­port, echo find­ings from the Bri­tish Bankers’ As­so­ci­a­tion (BBA) which were re­leased in De­cem­ber.

The BBA found that the num­ber of mort­gage ap­provals made to home buy­ers slid by a fifth in Novem­ber com­pared with the same month last year as a “sharp chill” set into the hous­ing mar­ket.

It also said that an­nual growth in con­sumer bor­row­ing us­ing credit cards, over­drafts and per­sonal loans con­tin­ued to grow at the fastest rate seen in six years, re­flect­ing an eas­ier bor­row­ing cli­mate and im­proved house­hold fi­nances.

Sev­eral ex­perts have said that they do not ex­pect the slide in hous­ing mar­ket ac­tiv­ity seen in re­cent months to last for long.

In De­cem­ber, the Gov­ern­ment an­nounced a com­plete over­haul of stamp duty, a move which is ex­pected to prompt a fresh up­lift in ac­tiv­ity early this year as more peo­ple are en­cour­aged to buy and sell homes.

The over­haul has ended the much-crit­i­cised “slab” struc­ture of the duty in favour of a grad­u­ated ver­sion of the tax. Un­der the new sys­tem, a home buyer will only pay the rate of tax on the part of the prop­erty price that falls within each tax band, in a sim­i­lar way to in­come tax.

The Bank of Eng­land data pro­vide on­go­ing ev­i­dence that the hous­ing mar­ket ended 2014 on the back foot, said one an­a­lyst, adding that some pick-up is ex­pected in hous­ing mar­ket ac­tiv­ity in 2015 from the cur­rent lows, although the in­crease in ac­tiv­ity will be rel­a­tively limited thereby keep­ing a lid on house price in­creases. On the as­sump­tion that there will be some pick-up in hous­ing mar­ket ac­tiv­ity dur­ing 2015 from cur­rent lows, they ex­pect house prices to rise by a solid but un­spec­tac­u­lar 5% this year.

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