UK Mortgage Approvals at Lowest Since Pandemic as Rate Rises Bite - BLOOMBERG
(Bloomberg) -- UK mortgage approvals fell to their lowest level in 2 1/2 years as higher borrowing costs took their toll on the property market.
Banks and building societies authorized 35,612 home loans in December, the fewest since May 2020 when the housing market was shut due to the coronavirus pandemic, Bank of England figures published Tuesday show.
Weakening demand is feeding through to house prices, which are on course to fall this year after booming during the pandemic. Nationwide Building Society is predicting a 5% drop, while Halifax thinks 8%.
An unprecedented series of interest-rate hikes from the Bank of England has bumped up the cost of mortgages. The effective rate on new loans rose 32 basis points to 3.67% last month.
Unsecured credit such as personal loans and credit-card debt rose just £500 million after hitting a five-month high of £1.5 billion in November. Consumers paid off half a billion pounds of credit-card debt over the Christmas period.