November 2007
Bank of England figures have stated the
number of mortgage approvals have fallen to a near three-year
low. According to the bank's latest report, 88,000 new mortgages
for home buyers were approved in October, 12% lower than
in September and down 31% from October a year ago.
Commenting
on today's Nationwide house price figures and the Bank of
England Mortgage Approval figures, Simon Rubinsohn,
RICS chief economist said: "This data provides further
evidence that the housing market is slowing sharply. However,
we still expect most of the fall-out from the current round
of turmoil in credit markets to be felt in terms of lower
levels of activity rather than outright house price declines.
This judgement is supported by the RICS sales to stock indicator
which continues to point to a shortage of supply. Typically,
prices only tend to decline in a meaningful way when forced
selling leads to a glut of supply.
Today's data will strengthen
the hand of the doves of the MPC ahead of next week's meeting
and could just swing the
balance in favour of an early cut in interest rates. This
would provide some welcome relief particularly for first-time
buyers who are feeling the full force of the credit crunch
as lenders become more discriminating in their lending activity.”
November 2007.
