By Anna Ellis • 31 May 2022 • 14:50
UK: Housing market slump feared as mortgage lending plunges by a third. CC/Creative Commons Attribution-Share Alike 2.0
Total lending for house purchases slumped to £4.1bn, from £6.4bn in March, as the impact of higher interest rates kicked in according to The Telegraph.
Bank of England data showed mortgage approvals fell to around 66,000 over the month, compared with 70,700 in March.
The number of loans granted was well beneath economists’ expectations, and below the average for the half-decade before the pandemic.
The sharp cost of living squeeze, and the rise in UK interest rates, could now be dampening the market, with potential house buyers more nervous about taking on debt.
Hina Bhudia, partner at Knight Frank Finance, said “Activity among purchasers is ebbing as the cost of living squeeze shrinks the pool of buyers,”
“Rates on certain products have doubled in the past 12 months and there is a real sense of urgency among many borrowers who sense they must act soon or reassess what they can afford.”
She added: “Demand to remortgage remains very strong as borrowers seek to beat rising interest rates. Certain lenders allow you to book rates up to nine months in advance, so thousands of borrowers are bringing forward decisions that in normal circumstances would have been put off.”
“Lenders are struggling to stay on top of the flow of new applications and are withdrawing and repricing product lines to maintain service levels.”
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Originally from the UK, Anna is based on the Costa Blanca and is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]
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