The housing market in the UK is effectively “being throttled” as an increasing number of families struggle to cope with their debt management problems.
Such is the claim of Howard Archer, chief UK and European economist for Global Insight, who believes that a lack of affordability and tight lending conditions are constricting activity in the mortgage sector.
Mr Archer’s comments came in response to the latest figures from the British Bankers’ Association (BBA) that showed its members approved a record low number of mortgage deals over the course of last month.
“The BBA data graphically highlight that housing market activity is currently being throttled,” he said.
“It is very possible that the Bank of England’s next move could be to raise interest rates which would clearly be very bad news for the housing market.”
The Bank of England considered the option of raising the base rate of interest earlier this month, which could have added to the difficulties of consumers and homeowners aiming to become debt free.
By Frank Charlton