Mortgage approvals fall

The number of new mortgage approvals fell sharply for a second month running in July.

08:48 01 September 2004

The number of new mortgage approvals fell sharply for a second month running in July in response to a significant rise in interest rates this year and attempts by the Bank of England to cool the market, official figures released by the Royal Institute of Chartered Surveyors show.

Mortgage approvals in July were down 26 per cent since last December and RICS says this is official confirmation of a slowdown in the housing market.

RICS also says this "concrete evidence" of a slowdown in UK housing market reflects recent RICS sales and lettings market surveys.

Approvals were last this low last March due to heightened uncertainty around the time of the Iraq war.

RICS economist Milan Khatri said: "Chartered surveyors have noted a marked slowdown in the housing market since the spring, with buyer activity down significantly. Investors are showing more caution about entering the market.

"The overall outlook for the market is now steadier as activity becomes less frenetic. This spells good news for first time buyers if the economic climate remains in good shape."