UK loan approvals for housing fall to year lows

The number of new loan approvals for house purchase in Britain fell to its lowest level in more than a year, according to official data on Tuesday, in a sign of what could be the start of a sustained slowdown in the property market.
The Bank of England said the number of loans agreed but not yet made to buy a house fell to a seasonally-adjusted 97,000 in July compared with 112,000 in June, the lowest since March 2003.
The figure is well below the three-month average to June of 119,000 and could be one of the strongest signals yet that Britons' appetite for taking on debt to buy property is ebbing.
While the figures show that a series of BoE interest rate hikes since last November are beginning to take their toll, financial markets did not react to the figures as they are not likely to dislodge expectations for another rate hike by the end of the year.
"There's growing evidence that there's going to be a fairly sharp slowdown in the rate of house price inflation in the second half of the year," said Alan Castle, UK economist at Lehman Brothers.
The data followed a more than 20 percent fall in comparable July approvals figures published by the British Bankers' Association - which only include contributions from banks but not other lenders - seen last week.
The BoE also said that mortgage lending growth eased last month to 8.65 billion pounds compared with 9.34 billion in the previous month - its smallest monthly gain since August 2003 - although it still remains at a high level.
Policymakers have said, however, that such strong figures are to be expected, simply given the high levels of property prices, which have been rising in double-digits on an annual basis for the past several years.
The data also showed that consumer credit growth slowed to 1.76 billion pounds in July compared with an explosive gain of 2.17 billion sterling in the prior month that most economists predicted would not be sustained. Consensus forecasts were for a gain of 1.6 billion pounds.
Separately the BoE said M4 money supply rose 1.0 percent on the month in July, taking the annual growth rate to 8.8 percent.
The BoE has lifted base borrowing costs by a total of 1.25 percentage point to 4.75 percent.