UK mortgage approval levels fall to two-year low

British lenders approved the fewest mortgages in nearly two years last month as the UK housing market continued to slow after June’s vote to leave the EU, raising the chance of an outright fall in prices next year.

House purchases have been falling since the start of the year, buffeted by higher taxation on investment properties as well as the EU vote. Housing market slowdowns have typically heralded future weakness in broader British economic growth.

However, other figures yesterday suggested for now UK consumers are continuing to spend and to borrow heavily, placing the Bank of England in a quandary as it considers whether it will need to cut rates for a second time this year.