April saw a drop of 30 per cent in mortgage approvals, according to the Council of Mortgage Data (CML). The poor figures, which amount to just 26,000 approvals in April, are being attributed to the continuing euro crisis which is adversely affecting confidence.
Concerns that house prices may fall towards the end of the year have surfaced as a result of these figures.
The worst-hit demographic are first time buyers, for whom mortgage advances dropped 48 per cent month on month and dipped 12 per cent year on year – to just 12,600.
Mortgage advances to home owners fell by 15 per cent month on month, but were up very slightly year on year by 3 per cent – 23,400.
The economic turmoil currently being experienced in Spain and Greece has had a dramatic effect on the eurozone, creating uncertainty that is being felt in many different sectors – not least the housing market.
That said, the drop in first time buyer approvals has been partly attributed to a big spike of buyers in March who were keen to take advantage of the final month of stamp duty holiday, thereby reducing demand in April.
Holders of products such as our holiday home and buy to let insurance policies – among many others – are watching the Eurozone with great interest. Key euro members France and Germany, along with beleaguered states such as Greece and Spain, are working hard to save the Eurozone bloc. The housing market keenly awaits its recovery.