Mortgage approvals down by 20%

New mortgage approvals fell to the lowest level for more than two years in September, according to figures released by the Bank of England.

The figures showed that 102,000 new mortgages were approved in September, down from 108,000 in August. This is the lowest level since July 2005 and the latest evidence to suggest that the housing market is cooling.

However, this fall was widely expected in the industry after the recent rises in interest rates, with many analysts predicting a fall in mortgage approvals.

Karen Ward of HSBC said that mortgage approvals were down by nearly 20%, but she did not expect a crash: “The evidence to date is pointing to a soft landing. Activity is moderating, and house inflation slowing. Of course, this is early days and the housing market has a tendency to snowball.”

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