Mortgage approvals in the United Kingdom dropped in September to its lowest level since March last year, due to weaker home loan demand, according to the British Bankers’ Association (BBA).
UK lenders had granted 31,104 home loans in September compared with 31,781 in the previous month, said BBA in a statement.
“Demand for new mortgages remains low despite more properties on the market and falling house prices,” said David Dooks, director of statistics at the BBA, adding that it is a “reflection of household uncertainties” ahead of the government’s spending review which was announced last week.
A survey conducted by Rightmove Plc showed that the number of people who expect home prices to decline outnumbered those predicting an increase for the first times since last year. This comes as Chancellor of the Exchequer, George Osborne, prepares to implement budget cuts to shrink the deficit that could lead to a huge loss.
The BBA report also indicated that unsecured credit demand contracted 1.6 percent in the first nine months, while consumer spending remains “subdued” and personal deposits rose 4.6 percent during the period.