UK mortgage approvals down over 70% year-on-year
The Bank of England has revealed a serious 72% drop in mortgage approvals when comparing October 2007 against October 2008. The exact number of mortgage approvals in October was 32,000 which was a fall of 1,000 from September to a level not seen since 1993 when records began. When compared to the 88,000 mortgages approved last October and 114,000 in May 2007 the figures literally speak of themselves.
Even though we have seen an increase in liquidity in the mortgage market of late, many potential home buyers are concerned about the threat to employment in the short and medium term and the ever-increasing cost of living in the UK. When you also add in the fact that property prices continue to fall in the UK and buyers are not necessarily flooding back into the market there is concern for the short to medium term outlook.
A drip feed of ongoing interest-rate reductions is sure to assist with sentiment but an increase in transaction levels is required before the overall market will improve. There is no doubt that the recovery of the UK economy hinges on a recovery in the property market and all eyes are on the short to medium term performance of the sector.
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