The Bank of England (BoE) has reported that March mortgage approvals fell back to 2017 levels, following a six-month high in January.
The BoE’s latest monthly money and credit statistical release shows that approvals have now fallen to their second-lowest level since August 2016, and are 22.7 per cent below their long-term average of 81,404.
Mortgage approvals for house purchases fell back to 62,914 in March from 63,781 in February and a six-month high of 67,018 in January after a near three-year low of 61,093 in December.
Analysts cautioned that while unseasonable weather may have affected numbers, it is more likely that the latest BoE figures show a cooling in the housing market.
“It is very possible that mortgage approvals for house purchases in March were affected by the severe weather,” said Howard Archer chief economic adviser at economic forecasting group EY ITEM Club. “Even allowing for this, the underlying performance over the first quarter points to the housing market remaining muted”.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said that bad weather could also not explain the drop in unsecured borrowing, which was at its lowest since November 2012.
The BoE figures also suggest there is little chance of house prices seeing a meaningful increase this year, and further dampens expectations of a rate rise this month.
“The latest mortgage approvals show the housing market is continuing to struggle to gain traction and we suspect that any meaningful upturn will remain elusive over the coming months,” said Archer.
“We expect house price gains over 2018 will be limited to a modest two per cent.”
Source: City A.M.