The number of new loan approvals for house purchases in Britain saw its biggest monthly fall in more than a decade in July in what economists say could be the start of a sustained property market slowdown.
The Bank of England (BoE) said today the number of loans agreed but not yet made to buy a house fell to a seasonally adjusted 97,000 in July compared with 112,000 in June. The monthly drop of 15,000 was biggest since comparable records began in April 1993.
The numbers are likely to please policymakers at the BoE who have expressed concern that the longer the property boom dragged on, the bigger a chance of a crash. They are also likely to bolster the view that British rates are approaching their peak.
Approvals, which have fallen for two consecutive months, are now at their lowest since March 2003, prompting analysts to call this one of the strongest signals yet that Britons' appetite for taking on debt to buy property is ebbing.
The data followed a more than 20 per cent year-on-year fall in comparable approvals figures published by the British Bankers' Association last week and so some drop was widely expected by analysts.
Economists view approvals as a leading indicator of house price inflation. July's collapse will likely give house price reports even more significance in coming months than they already have in a nation where two-thirds of households own their homes.