"More recently, housing demand has cooled considerably as buyers have baulked at the prices being demanded and mortgage approvals have fallen back. As market conditions ease, a period of more modest house price growth is likely."
- Capital Economics
Approvals for new mortgages in the United Kingdom decreased more than expected in August of this year, as the Bank of England's measures to prevent bubble on the housing market seem to have started working. In total, there were 64,212 new mortgages confirmed by banks last month with the net value of 2.3 billion pounds, a decrease from 66,100 in July. Analysts, however, forecasted a moderate decrease to 65,000. They also point on cooling property market in the country after a considerable increase during last couple of years. Despite the Government's Help-to-Buy program, aimed to increase lending to families who want to buy a new house, the Bank of England implemented some restrictions on risky lending, as nowadays new mortgages cannot be more than 4.5 times bigger than borrower's income. Along with that, home prices in the British capital decreased for the first time in two years in September, according to Hometrack Ltd data.
Meanwhile, business lending improved in August, as it added 817 million pounds on a monthly basis, registering the second consecutive month of advance. Still, it is 2.8% below the record level, posted a year before. Lending to small and medium-size firms, however, slipped 301 million pounds or 2.4% year-on-year. On the other hand, new loans to individuals rose 3.2 billion pounds in August, a growth pace of just below the record-high levels.
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