UK Housing Market Cooling?
UK mortgage approvals have shown their lowest increase in 6 months, fuelling rumours that the housing market in the UK is approaching it’s peak and that many people are on the limit of the credit they can handle. Towards the end of 2006, research showed that the UK housing market was strong and healthy, however with the Bank of England raising rates unexpectedly in January 2007, and at least one more rise predicted, it seems the interest rates have started to hit some people and is dampening the housing bubble.
December 2006 showed 113,000 new mortgage approvals, a decrease of 12% from the 3 year record high of 129,000 mortgage approvals in November. New mortgage approvals are often used as a benchmark and are normally a predictor of the future movement of the housing market.
The net effect is that most analysts are predicting a softer housing market in 2007 as downward pressure increases on homeowners.
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