Gloom for George Osborne after mortgage approvals fall for fifth straight monthComments Off on Gloom for George Osborne after mortgage approvals fall for fifth straight month
British Bankers’ Association figures showed just 36,717 mortgage approvals for house purchase in November. This was down for the fifth month running and a 20% slump on last year in the wake of regulators’ efforts to cool down runaway prices earlier in the year.
Experts said April’s mortgage market review — tightening lending criteria —had put the brakes on the market, although George Osborne’s overhaul of stamp duty in this month’s Autumn Statement could drive a small revival early next year. Buyers paying less than £937,500 for a new home will pay lower stamp duty under the new regime.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The changes to stamp duty should provide a modest fillip in the spring but we expect uncertainty around the general election to keep the housing market fairly subdued until after May.”
Meanwhile, estimates of the UK’s economic growth between July and September were left unchanged at 0.7% but the small print revealed a 1.4% fall in business investment over the quarter — twice as deep as originally thought. The annual pace of expansion was also trimmed from 3% to 2.6% after growth in earlier quarters was revised down.
Inflation is down to a 12-year low of 1% in November as oil prices tumble is easing pressure on household budgets. But the poor investment figures underline concerns over whether the UK can make a sustainable recovery next year.
Business investment and net trade knocked 0.3 of a percentage point of growth off the economy in the third quarter, according to the Office for National Statistics. Household spending in contrast contributed 0.6 of a percentage point as consumers kept spending. They dug into nest eggs to do so as well, as the household savings ratio fell to 7%.
Samuel Tombs, chief UK economist at Capital Economics, said: “The expenditure breakdown of GDP shows that Q3’s expansion was even more unbalanced than previously thought.”
Data on the UK’s “economic well-being” showed that GDP per head of population grew 0.6% between July and September but remains 1.8% below the downturn. Disposable income per head has remained broadly flat since the beginning of 2012 and is 5.6% below 2008 levels, according to the ONS.