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Mortgage approvals fall to 14 month low


The number of mortgages approved for house purchases has fallen 10% in a year, The British Bankers Associate (BBA) have said. There are now fears that the housing market is beginning to cool.
There has been a total of 39,271 loans approved for house purchases over the month, which is a 14 month low. The pervious six months’ average was 42,589.

The Mortgage Market review (MMR), bringing in new affordability checks and tougher questioning for potential buyers had a major effect on mortgages in the summer. Although it looked like the mortgage market might be seeing the tail end of the effects of the MMR, it seems to still be having a knock on influence later on in the year.

Richard Woolhouse, chief economist at the BBA, said: “A year ago there were many of us who were concerned by the heady pace of property price rises. Today’s figures suggest we are now experiencing a steadier housing market and that’s no bad thing.”

Howard Archer, chief UK economist at IHS Global Insight, said: “The fact that mortgage approvals are substantially below their January peak levels – and are currently falling - after lenders have now likely got to grips with the new mortgage regulations points to an underlying moderation in housing market activity.”

He added: “With housing market activity well off its early-2014 highs, we suspect house prices will generally rise at a more restrained rate over the coming months. Specifically, we expect house prices to rise by around 1.0% quarter-on-quarter in the fourth quarter of 2014. We see house prices rising by around 5% in 2015.”

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