Experts say a sustained upturn in the UK housing market is unlikely after mortgage approvals fell back in September.
Figures just released from UK Finance show September’s approvals dropped to 41,584 from August’s six-month high of 41,762. June saw a nine-month low of 40,412 approvals.
Buyer enquiries fell for the sixth month running, while agreed sales also fell. Both were at the weakest level since July 2016.
Howard Archer (pictured), chief economic advisor to the EY ITEM Club, said the outlook for house prices in the fourth quarter of 2017 was “subdued”, rising to a modest 2-3% in 2018.
“While housing market activity has firmed modestly from the lows seen around June, September’s slight easing back in mortgage approvals reinforces our belief that there is unlikely to be a sustained, significant upturn in housing market activity any time soon,” he said.
“Housing market activity is being pressurised by weakened consumer purchasing power and substantial consumer wariness over engaging in major transactions.”
He said house buyers would be concerned by Bank of England suggestions that interest rates could rise sooner rather than later, with a hike as soon as November a possibility.
“The fundamentals for house buyers are likely to remain challenging over the coming months, with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth,” he added.
“Additionally, housing market activity is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions.”