Report says housing market may be cooling

THE number of mortgage approvals made to home buyers fell to a 14-month low in September, new figures show.

In further signs that the housing market may cooling, 61,267 home loans for house purchase, collectively worth £10 billion, got the go-ahead last month – the lowest number seen since July 2013.

The figures, from the Bank of England, echo a recent report released by the British Bankers’ Association (BBA), which found that the number of mortgage approvals made to home buyers edged below 40,000 in September for the first time since August 2013.

A string of other studies have also pointed to a calmer autumn following a burst of activity in the first half of this year, during which time house prices in some parts of the UK rose to record highs.

Richard Woolhouse, chief economist at the BBA, said the Bank of England’s figures show that “we are now experiencing a steadier housing market, which is no bad thing given previous concern about the pace of property price rises”.

Matthew Pointon, a property economist at Capital Economics, predicted that the current “weak patch” in mortgage approvals will not last.

He said: “The economy is growing at a robust pace, and the employment rate continues to rise. Furthermore, the threat of an imminent rise in interest rates is receding.”

Stricter mortgage lending rules were introduced in April, with lenders having to ask mortgage applicants for more details.

Meanwhile, the Bank of England recorded a £900 million increase in borrowing using personal loans and overdrafts in September, the biggest upswing seen in six months.

Credit card lending increased by £15m, which the Bank said is “broadly unchanged”.