Mortgage lending declines for second month in a row
More evidence of a housing market slowdown has come with the news of a drop in mortgage lending for the second successive month.The Bank of England (BoE) has revealed approvals for house purchases fell back to 64,212 in August, from 66,100 in July and 66,923 in June. This is compared to the average of 65,738 over the previous six months. However, the bank's remortgaging figures were slightly healthier, with the number of approvals for this purpose standing at 32,273, compared to the average of 31,978 over the previous six months. Some 9,804 approvals were made for other purposes, against an average of 10,917 over the previous half-year.The news comes just ahead of the implementation of lending restrictions, which will prevent lenders from issuing more than 15 per cent of new residential mortgages to individuals borrowing four and a half times their income or greater.Mark Harris, at mortgage broker SPF Clients, commented: "With Mark Carney stating last week that the first interest rate rise is getting closer, borrowers should not be complacent about low interest rates."While the governor of the BoE pledged that increases would be limited and gradual, borrowers must still plan ahead and ensure they can afford their mortgage now and in the future."Earlier this month, the Council of Mortgage Lenders (CML) revealed mortgage lending slowed during August, falling by five per cent on the previous month's figure.The organisation's figures showed gross mortgage lending stood at £18.6 billion last month, down from July's figure of £19.7 billion.According to the CML, a plateau could have been reached, with borrower appetite on the decline and the Mortgage Market Review changes exerting an influence on the market.Hometrack's latest monthly market survey indicated a cooling of the housing market, with zero growth recorded during September.
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