Fall in mortgage approvals as rates rise after Budget
Share:
Mortgage approvals saw a surprise fall in November after Rachel Reeves's Budget resulted in higher borrowing rates, Bank of England figures showed yesterday. The number of home loans approved by lenders dropped to 65,720, a three-month low – down from 68,129 in October – after the Chancellor's announcement. Economists had expected the figure to rise slightly to 68,500.
Housebuilders' shares fell after the data was published, with FTSE 100 firms Persimmon down 3.8 per cent, Barratt Redrow falling 3.2 per cent and Taylor Wimpey off by 3.4 per cent. The fall in mortgage approvals came after the Budget on October 30, which included policies that are expected to add to inflation pressures. That is likely to make the Bank of England cautious about cutting rates. And lenders have responded by increasing the rates on fixed-term mortgage deals.
Nathan Emerson, chief executive of property professionals' body Propertymark, said: 'The impact of higher interest rates without doubt has had a profound impact across the housing market. 'Consumers need to feel a degree of confidence within their financial position to approach the buying and selling process.'.
Struggle: The fall in mortgage approvals came after the Budget on October 30, which included policies that are expected to add to inflation pressures. Matt Swannell, chief economic adviser to the EY ITEM Club, said high rates on swaps – financial products used by lenders to price home loans – meant that mortgage rates were 'likely to stay high'.
