Has The Property Market
Finally Started to Slow Down?
New figures from the Building Societies Association suggest that although mortgage lending approvals were greater in October 2006 than the previous October, the rate that the loans are actually being taken up suggests that house buyers are having increasing difficulty in finding suitable properties within their price range.
- Building society gross advances amounted to £4,936m in October 2006, compared to £3,808m in October 2005.
- Net Advances were £1,661m in October 2006, versus £929m in October 2005.
- Approvals were £4,280m in October 2006, up from £3,870m in October 2005.
- Building societies had net inflows of £772m, compared to net receipts of £822m in October 2005.
Commenting on the mortgage market, Brian Morris, BSA Head of Savings said:
“The mortgage market continues to be relatively strong with the highest level of lending and loans approved in an October for 3 years. However, the month-on-month decline in loans approved but not yet made (down 9% seasonally adjusted) may be an early indication that the heat is starting to be taken out of the market.
“This might be the August rate rise continuing to work through, or the prospect of higher rates in the future putting off prospective buyers. We would echo the warnings from the Bank of England and the FSA that people need to take into consideration their ability to pay over the long-term when taking a loan.”
Commenting on the savings side, Mr Morris said:
“The figures suggest people continue to save at a steady pace. While this month’s rate rise may hit borrowers, savers will find it more attractive to increase the amount they put away in their building society accounts.”
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