There was little change to the mortgage approval statistics in July, showing that the housing market is still sluggish.
Mortgage lending companies granted 48,722 mortgages in July, up by just 160 on the June figure, the Bank of England reported on Tuesday. However, net mortgage lending dropped to just £86 million in July from £518 million the month previously.
UK house prices also dropped in August, recording the largest fall (0.3%) since April 2009, according to Hometrack Ltd. It is widely believed that this was caused by the housing market undergoing a modest re-pricing that could be with us for at least 12 months. Hometrack’s director of research, Richard Donnell, said the demand for housing is growing weaker and this cannot simply be put down to a seasonal blip.
Data relating to the housing market has recently been downbeat and prospects for the immediate future do not look any better. An economist at Capital Economics Ltd, Paul Diggle, pointed out that although there was a slight increase in mortgage approvals, the bigger picture still shows subdued activity with little chance of improvement in the coming year.
Despite the sluggish market, more than 1,500 new mortgage schemes came onto the market last month. As of 30th August, there were 7,618 live schemes; an increase of 25% on the beginning of the month and the largest monthly increase for more than 20 months. In fact in the past 12 months, 5,000 new products have been introduced, according to Mortgage Brain.
5,020 fixed rate mortgages and 949 variable rate mortgages were available at the end of last month, but the number of tracker mortgages (1,649) declined again.
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Image: sluggish cat by R’eyes
