According to a new report released by the BBA today, the number of new home loans approved in April remained relatively stagnant compared to previous months. It is suggested that the curb is further evidence of an overall slowdown in the market, due to increased interest rates.
The total number of newly approved home loans for the month of April was just shy of 65,000, which represents a drop of almost 15% faired against February 07 figures. Analysts suggest that mortgage loans are becoming to expensive for many consumers, in light of a further rise in national interest which currently stands at a record high of 5.5%. Analysts also predict an additional rise in interest over the next few months, with many expecting a reach of 6% for Q4 2007.
Changes in our economic climate are almost certainly having an effect on the housing market. It is suspected that the overall demand for home loans is likely to decline even further as the year progresses. The new data also compliments house market theories with regards to home value growth. Home values grew by a mere 0.7% for the month of May, which represents the slowest incremental increase for some time. The average home in the UK is valued at around £175,000.
Reports also suggest that a decline in national secured borrowing has spurred growth in the unsecured sector. Accordingly, the accumulative total of unsecured loan and credit card borrowing has increased by a margin of £160 million for the month of April. Current interest rates have made secured loans and mortgages significantly less attractive to consumers, faired against their position this time last year.
