LONDON (dpa-AFX) - The number of mortgage approvals for house purchases in the United Kingdom declined in November, with households and businesses seeking less credit due to weak economic prospects.
The British Bankers' Association (BBA) said Friday that the number of mortgages approved in November totaled 34,738, less than 35,196 in October. Economists expected approvals to rise to 35,400.
Until there are clear signs of improvement in the economy and stability on the international front, households and businesses lack the confidence needed to seek credit for spending or investment, BBA Statistics Director David Dooks said.
House purchase approvals were lower than in October but 16 percent higher than in November 2010. Gross mortgage lending of GBP 8.2 billion in November was slightly stronger than October and 5 percent higher than in November 2010, BBA said.
The slight upturn in recent months in both house purchase and remortgaging approvals has led to slightly stronger gross mortgage lending, but capital repayment continues at a high level, so net mortgage lending increased by only GBP 0.3 billion in November, the association said.
'We suspect that low wage growth, a markedly weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices,' said Howard Archer, chief economist at IHS Global Insight.
British consumer confidence declined to its lowest level in almost three years in December, as pre-Christmas spending failed to lift sentiment, research firm GfK NOP said in a report this week.
According to a quarterly report published by the Bank of England earlier this month, British households are expected to continue to lower their spending next year on fears of fiscal consolidation.
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