- 08
- Apr
Speculation that the housing markets might be running out of steam was given another boost by new figures showing that the number of new home loans approved at the start of the year fell to their lowest level for sixteen years.
The figures which were published by the Council of Mortgage Lenders show that new loan approvals came to a total of only 49,000 in February. That figure is down by 3.5% from January and down 33% from February 2007. This is the lowest reading since early 1992, during the last recession.
CML’s director general, Michael Coogan, warns that the situation is likely to get much worse over the coming year.
Most experts are expecting plenty more downsides in the coming months which will eventually bring about a sharp fall in house price inflation. The housing market has a history of snowballing in times of recession, so a house price crash in the coming months cannot be ruled out.
The Bank of England data has show that while the credit crunch has impacted on the housing sector it has failed to deter consumers from taking on more debt with borrowers rushing to try and consolidate debts before they turn bad.
