Drop in Mortgage Approvals
Recent reports have told us us that house prices are still on the increase albeit at a slower rate than we have become accustomed to over the past few years.
Despite this, there has been a 14.2% drop in the mortgage approval rate, in fact August 2007 showed the lowest number of mortgage approvals since 2000. This decline in mortgage approvals is probably a combination of banks and building societies having stricter criteria than of recent years as well as the 5 interest rate increases of late.
The buy-to-let mortgage market could the one that will suffer the most. Julia Harris of MoneyFacts.co.uk says "the ease, choice and cost of buy-to-let products is taking a battering at the moment". The credit situation of late has made all financial institutions have a major rethink and make drastic changes to the way they offer loans. The cost of repayment has increased making borrowing, especially for property purchases, a more expensive process than we have grown accustomed to.
The sale of white goods such as fridges, freezers and washing machines, which is associated with house moving, has continued to fall over the summer months. Piecing everything together indicates the housing situation is gradually slowing down.
The word on the street is that there could well be an interest rate cut by the end of the year to help ease the strain.
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