ROOF Blog

The number of mortgages approved for house purchase fell for the third month in a row during February as the housing market continued to show signs of slowing down, figures revealed today. A total of 47,094 loans were approved for people buying a home during the month, 21% down on the recent peak reached in November last year, according to the Bank of England. However, the Bank’s figures also showed a rise in unsecured lending during the month, with consumers taking on more debt through credit cards, personal loans and other forms of credit than at any time for 15 months.

House prices are up 0.1% compared to February, the smallest margin ever recorded at this time of the year, when prices have never fallen month on month, according to property website Rightmove. The near standstill in prices has fuelled concerns that a decline in the housing market could lead to a slowdown in the wider economy as unemployment, public sector spending cuts and potentially higher interest rates hit the consumer. Both Nationwide and Halifax reported house price falls in February. Nationwide said average prices dipped 1% to £161,320, ending a run of nine consecutive monthly rises. Halifax reported an even sharper fall of 1.5%, with average house prices dropping to £166, 857. It remains unclear whether February’s data was a blip caused by the severe weather conditions in the UK or a more long term trend.

Fears of a double-dip recession and a sterling crisis in the run-up to the election were raised last night amid news of collapsing investment in British industry and a warning from one of the world’s leading financiers that the pound could plummet within weeks. The pound fell sharply on the foreign exchange markets after a day of grim economic news which saw an admission from RBS that it had missed government targets for business lending, a downgrading of the UK growth prospects by the European commission and a warning from the CBI that consumer spending was likely to remain weak ahead of polling day.

The recession’s toll on consumers will be laid bare today as Bank of England figures show that nearly a third of workers have had their household income drop by at least £1,200 a year amid soaring unemployment, shorter working hours and pay freezes.

About 30 per cent of manual workers and 27 per cent of office workers said that their disposable income – money left to spend each month after paying tax, housing costs, utility bills and loan payments – had fallen by £100 or more over the past 12 months, according to the Bank’s ‘Quarterly Bulletin’.