Personal Finance

Mortgage approvals fell in June

Mortgage approvals fell during June, Bank of England figures have shown.

A total of 47,643 home loans were approved during the month - down 4% on the figure for May.

The June figure was also below the 50,036 average for the previous six months - leading to fresh warnings over the fragile housing market.

The news comes after building society Nationwide attributed falling house prices to a shortage of buyers last month.

The average price dip of 0.5% was the first fall since February.

More properties have come on to the market since the Government scrapped home information packs, but buyers are much thinner on the ground as confidence is sapped by unemployment worries as well as austerity measures to tackle the deficit.

Wider credit conditions have tightened in recent months due to sovereign debt fears in Europe, threatening a further blow to the health of the banking sector.

IHS Global Insight economist Howard Archer said mortgage approvals were "well below" the 70,000-80,000 level consistent with stable house prices.

Vicky Redwood, senior UK economist with Capital Economics, added: "With new instructions rising, but new buyer demand fading, further house price falls look pretty inevitable."

Sam Jackson

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