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BoE data highlights contracting property market

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  • 31/05/2017
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BoE data highlights contracting property market
Approvals for house purchase and remortgaging loans fell further in April, confirming a 7% transaction drop since the start of the year.

Data from the Bank of England showed that 118,370 loans for house purchase and remortgage were approved in April, down from 127,745 in January.

Remortgaging was hardest hit (down 11%) with house purchase loans slightly less badly affected (down 6%). (See graph)

The drops were another indication of the slowing property market around the country since the start of 2017.

Perhaps encouragingly, gross mortgage lending was £21.3bn for April, up slightly on the previous month (£20.9bn) and the six-month average (£20.6bn).

However, net lending on properties slipped to £2.7bn in April – its lowest figure since April 2016, according to the Bank of England.

BoE-data-April17-3

Not unexpected

Hope Capital CEO Jonathan Sealey said the falls were not unexpected considering the snap general election and ongoing Brexit uncertainty.

“It’s promising to see that gross mortgage lending in April was higher than the six-month average, suggesting that the UK’s housing market has once again remained steady,” he said.

“The months and weeks that precede such an event are typically and understandably quieter, as housing demand drops as more people adopt a more cautious approach.

“However, it is likely that activity will soon again pick up afterwards, and now that the main political parties have outlined significant housing promises in their manifestos, the elected government must follow through with their housing election pledges in order to tackle the housing crisis head on,” he added.

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