Tumbleweed spotted in mortgage departments

The Bank of England announced yesterday that that mortgage approvals for house purchases dropped to about 73,000 in December from 81,000 in November, which is the lowest since the middle of 1995. This re-enforces the widely held view that the UK housing market is in a worse state than it was in the 2005 downturn.

This probably reflects a tightening of supply and a fall-off in demand. Mortgage lenders are being more choosy about who they lend to and doing so on harsher terms, whilst many buyers seemingly believe house prices are falling and hence can buy cheaper by waiting.

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