The latest Bank of England mortgage figures suggest that approvals for home buyers are running at more than a fifth below long-term norms.
That’s the view of Howard Archer, chief economic advisor to the EY ITEM Club, a forecasting organisation.
The Bank of England last week reported that mortgage approvals for house purchases fell back to a seven-month low of 63,728 in November after rising to a nine-month high of 66,709 in from 65,313 in September.
Mortgage approvals had previously improved to October’s high from a 2018-low of 63,367 in March.
“At 63,728 in November, mortgage approvals are subdued. They are 21.3 per cent below their long-term (1993-2018) average of 80,969” explains Archer.
“November’s level of 63,728 took mortgage approvals for house purchases towards the bottom of the 63,000-68,000 range that has broadly held for the past two years. It fuels our belief that Brexit and economic uncertainty may now be having an increased dampening effect on housing market activity” he adds.
He says housing market activity is also being limited by relatively limited consumer purchasing power - despite some recent improvement - as well as by fragile consumer confidence and, possibly, wariness over higher interest rates.
However, Archer says the UK-wide picture is heavily skewed by the problems in London and the south east, where the housing market is significantly more challenged than in the rest of the country
