The number of UK mortgage approvals dropped to its lowest level in four months, as increasing jobless claims undermined consumer confidence and an additional public holiday in April dampened home purchases.
According to the Bank of England, mortgage approvals to buy homes dropped to 45,166 in April, compared with the amended 47,145 in March. The April figure is the weakest since December 2010.
Economists estimate a decrease to 47,000 from the 47,557 reported in March.
Meanwhile, Hometrack Ltd expects house prices to drop by around one percent this year, as Britons find it more difficult to obtain home loans.
The real estate market may come under further pressure, as Prime Minister David Cameron’s government has imposed the largest expenditures since World War II and inflation forces some policy makers to consider higher interest rates.
Nida Ali, an economic adviser to the Ernst & Young ITEM Club, said, “Given the pressure the UK consumer is currently under, it is no surprise that housing demand remains exceptionally weak.”
“Historical trends suggest that mortgage approvals of about 45,000 are consistent with falling house prices.”
To contact the journalist, you may send your message to editor@propertyguru.com.sg