Britain’s housing market continues to stall as mortgage approvals drop to their lowest levels in nine months.
There was also a drop in lending growth as the economy seems to stagnate.
Figures from the Bank of England show that there were 64,684 mortgage applications approved in June, a fall from 65,109 in May. This is the lowest number of mortgage approvals in a single month since September 2016.
These figures are particularly worrying given the BoE’s forecast, released just three months ago, suggested that mortgage approvals would average around 71,000 a month.
The Office for National Statistics’ house price index showed a 4.7 per cent annual growth for the year to May, down from a 5.3 per cent growth in the year to April. This is similar to figures provided by the Halifax and the Nationwide, both of which suggest that growth has declined since the UK’s vote to leave the EU.
There was also a fall in consumer credit growth, with the annual rate slipping to 10 per cent from the 10.4 per cent growth seen in May.
The rate peaked at an 11-year high last November, when the rate of growth was 10.9 per cent.
Banks have recently been warned against complacency and told that they should not assume that the low rates of loan defaults currently being experienced would last indefinitely.
The BoE’s MPC will meet later this week to discuss the possibility of raising interest rates from the record-low 0.25 per cent, as well as updating their quarterly economic forecasts.
The British economy has suffered its slowest start to a year since 2012, with consumer coming under increasing pressure following a rise in inflation and suffering losses in their ‘real terms’ wages.