Consumers turn to cash
Fewer house buyers curb mortgage demand
New data from the British Bankers Association show that banks approved 40,659 mortgages in November, falling from 40,835 in October – which was a five-month high – and down 9% compared with a year ago.
Rebecca Harding, BBA chief economist, said: “We’ve seen personal deposits, in particular, grow more strongly in recent months as consumers hoard cash in the absence of higher-yielding, liquid investment opportunities.
“This growth in personal deposits may also suggest that consumers are looking to grow their cash reserves against potential economic uncertainties, such as an expectation of lower wage growth.”
The fall in mortgage approvals contrasts with a forecast from Scottish estate agency Warners which expects house prices across Edinburgh and the Lothians to continue inching upwards throughout 2017 with an annual rise in prices of around 3% across the region.
David Marshall, operations director, said: “There will be a moderate increase in the supply of properties coming onto the market but, with demand already outstripping supply by some distance, this will simply serve to rein in some of the more rapid house price rises that we saw this year.”