Mortgage approvals fall back in December
Britain's housing market may be starting to react to the recent rises in interest rates with mortgage approvals falling sharply in December.
Figures from the British Bankers Association showed an 11.1% dip in the number of approvals for house purchases to 45,533 in December, from 51,233 in the same month in 2005, the first annual fall since April.
The number of total mortgage approvals, including remortgages, came in at 123,518, down 12.3% on 2005. Underlying net mortgage lending increased by £5.8bn compared with November's increase of £6.7bn.
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David Dooks, BBA director of statistics, said the housing market remained strong despite the latest figures.
"The final quarter of last year, despite seasonally lower activity in December, showed the mortgage market to be stronger than at the same time a year earlier and lending still growing significantly at a time of rising interest rates," he said.
Earlier this month the Bank of England raised UK interest rates to 5.25% with many economists predicting a further rise this year.
