Mortgage lending and house prices slow
House prices rose by just 0.1 per cent in July and mortgage approvals fell eight per cent in June, as the UK property market starts to slow.
The Nationwide House Price Index shows that after June's 1.1 per cent house price increase, growth stalled in July as prices rose by just £200 to an average of £184,270.
Fionnuala Earley, Nationwide chief economist, said: "After surprisingly picking up steam in June, house prices were almost unchanged in July, and their underlying trend growth resumed a downward path."
Meanwhile figures from the British Bankers' Association show there were 193,850 mortgage approvals in June, an eight per cent fall on a year ago. However, the month's gross mortgage lending hit £21.5 billion, the highest figure ever, as the size of the average loan rose 16 per cent to £159,600.
Approvals for house purchase were down 11 per cent by number and three per cent by value, while approvals for equity release fell 13 per cent by number and three per cent by value.
David Dooks, BBA director of statistics, said: "Although the trend in net mortgage lending is being maintained, approval numbers for house purchase are well down on this time last year, suggesting that market demand may be reacting to higher mortgage costs.
"Spending on credit cards was lower than at the same time last year, reflecting weaker retail sales but the reducing appetite for unsecured borrowing continues the pattern seen over the last two years."
Commenting on both sets of figures, Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said: "Interest rates are finally manifesting their way into the minds of homebuyers with the expected slowdown in the housing market now upon us.
"We anticipate a sluggish period going into Christmas, although price declines are not on the cards as employment continues to show solid gains. Consumer spending is likely to ease back going forward as the wealth effects that have been supporting a 'Cinderella culture' start to wane.
"We continue to expect a further interest rate hike however despite the softer tone of today's data.