Number of mortgage approvals falls during May
New figures from the British Bankers' Association (BBA) provide further evidence the UK housing market may be moderating.The BBA revealed mortgage approval volumes weakened during May, suggesting future house sales may decline from their current high levels.This slowdown in approvals was attributed to the new mortgage rules and has had more of an impact on remortgaging and other secured loans than on house purchases.Approvals dropped for the fourth consecutive month and were down to 65,132 from 70,294 in April. This is a 3.5 per cent fall on the figure for May 2013 and over 10,000 below the previous six-month average.New lending rules were introduced by many high street banks in April, in advance of the Mortgage Market Review, which is expected to impose stricter borrowing conditions.Remortgaging activity fell during May, down to 18,206 from 20,448. Other secured borrowing also declined from 7,913 to 5,168.Chief economist at the BBA Richard Woolhouse said: "Our figures indicate that the heat appears to be coming out of the housing market. These are the first mortgage approval figures we have seen since the introduction of the Mortgage Market Review, so it is significant they have fallen for the fourth month in a row. "This is being driven by a drop in remortgaging and people borrowing against the value of their homes."Bank of England governor Mark Carney is set to announce new lending rules this Thursday (June 26th) aimed at preventing the emergence of a housing bubble.Fears the UK property market could destabilise the economic recovery have grown in recent months but the latest data suggests the market may already be cooling.Property website Rightmove said prices have now reached a virtual standstill following the large increases that took place in the first half of the year - new seller asking prices rose by just 0.1 per cent in June.Statistics from Nationwide and the Royal Institution of Chartered Surveyors have corroborated this analysis.
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