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Mortgage approvals fall following two-year high

By Daniel Culpan

4 July2021

Brightly lit house Mortgage approvals have seen a further fall following a two-year high recorded earlier in 2021, causing speculation that house prices could drop over the next few months, The Independent reports.

Figures from the Bank of England revealed that there were 51,098 mortgages approved for house purchase in May, totalling 7.6 billion. This marks the lowest figure since March 2021 and shows a significant fall from a 25-month high seen back in January.

At the start of this year, mortgage lenders and estate agents saw a stampede of first-time buyers trying to rush through home purchases before the end of a two-year stamp duty concession, which ended in March.

Back in January, there were 58,728 home loan approvals - with lenders putting this down largely to a sudden burst of sales due to the stamp duty deadline, which would otherwise have been made later in 2021.

Lenders are expected to carry on tightening their borrowing criteria and increasing their mortgage rates in light of the struggling economy and the ongoing eurozone problems - making it more difficult for homebuyers to get a mortgage.

Howard Archer, chief UK and European economist at IHS Global Insight, commented: "The ongoing muted mortgage activity reported by the Bank of England maintains our suspicion that house prices are likely to drift lower over the second half of 2021 and are likely to fall by around 3% from current levels."

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Tags: mortgage, house prices, property, home, Bank of England, economy, recession

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