November findings from the Bank indicated that 83,000 new mortgages were approved for home buyers, down 6,000 from October’s results.
The Bank’s statistics also showed that the 12-month growth rate fell to 9.5 per cent, although the number of loans approved for remortgages increased to 95,000.
In addition, the figures revealed that many people had been put off cashing in on the increased value of their homes to borrow more money, with 60,000 loans secured on properties in November – half the record of 120,000 achieved
in November 2003.
Gary Styles, strategy, risk and economics director at Hometrack said: “The Bank of England mortgage data for November provides more evidence that the mortgage market is slowing sharply. Total mortgage approvals, including remortgages, in November were 26 per cent lower than in the same month in the previous year and house purchase approvals were down by 37 per cent.
“With house price inflation slowing and mortgage lending falling, it looks likely that the housing and mortgage markets will require lower mortgage interest rates in the next few months to ensure a soft landing.”
However, Peter Williams, director at the Intermediary Mortgage Lenders Association, urged the industry to remain buoyant. He said: “While lenders do expect an easing of demand for loans next quarter, we don’t see British consumers throwing themselves off Beachy Head. We could easily talk ourselves into recession, and we see no logical justification for that. What we are seeing is a correction from record levels of lending and the underlying fundamentals of this market remain very strong.”
