Growing risk from UK household debts, warns Moody’s amid lending boom fear

Just 64,684 mortgages were approved to homebuyers last month, the lowest number for any month since September of 2016.

A rise in remortgaging did bolster the overall lending figure as existing homeowners take advantage of low interest rates.

As a result net borrowing rose by 3.1pc over the past 12 months, a small increase on the 3pc annual growth recorded in May.

“House prices look unlikely to rise by more than 2pc over 2017, and are expected to be essentially flat over 2018,” said Howard Archer, chief economic adviser to the EY Item Club.

“The fundamentals for house buyers are likely to remain weak over the coming months with consumers’ purchasing power continuing to be squeezed by inflation running higher than earnings growth. Additionally, housing market activity is likely to be hampered by soft consumer confidence and limited willingness to engage in major transactions.”

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