The number of new mortgages approved for home buying fell for the seventh consecutive month in December, the Bank of England has said.
The number of new mortgages approved for home buying fell for the seventh consecutive month in December, the Bank of England has said.
It said 73,000 mortgages were approved for home buyers last month, down from a revised figure of 81,000 in November.
It said 73,000 mortgages were approved for home buyers last month, down from a revised figure of 81,000 in November.
Growth in consumer credit also slowed, with figures showing a rise of £557m - the smallest increase since April 2007.
Growth in consumer credit also slowed, with figures showing a rise of £557m - the smallest increase since April 2007.
The data comes as surveyors have warned that first-time house buyers are facing an affordability crisis.
The data comes as surveyors have warned that first-time house buyers are facing an affordability crisis.
Decline
Decline
Mortgage approvals for people remortgaging rose slightly to 97,000, but the number of mortgages for other purposes - such as equity release and buy-to-let - continued to decline.
Mortgage approvals for people remortgaging rose slightly to 97,000, but the number of mortgages for other purposes - such as equity release and buy-to-let - continued to decline.
The current housing slowdown is more pronounced than in 2005 Ian Kernohan, Royal London Asset Management In total 226,000 home loans worth £25.4bn were approved during December, significantly below the average for the previous six months of 262,000.
The current housing slowdown is more pronounced than in 2005 Ian Kernohan, Royal London Asset Management In total 226,000 home loans worth £25.4bn were approved during December, significantly below the average for the previous six months of 262,000.
Analysts said the weaker-than-expected figures offered further proof of the property market's continuing slowdown.
Analysts said the weaker-than-expected figures offered further proof of the property market's continuing slowdown.
"The latest mortgage approval numbers indicate that the current housing slowdown is more pronounced than in 2005," said Ian Kernohan, an economist at Royal London Asset Management
"The latest mortgage approval numbers indicate that the current housing slowdown is more pronounced than in 2005," said Ian Kernohan, an economist at Royal London Asset Management
"The fallout from the US housing crisis is spreading to the UK via a general squeeze on credit availability and the MPC will seek to offset some of this effect by cutting rates again next month," he added.
"The fallout from the US housing crisis is spreading to the UK via a general squeeze on credit availability and the MPC will seek to offset some of this effect by cutting rates again next month," he added.
The figures come the day after the Land Registry said house prices in England and Wales fell by 0.4% during December, the first decline it has recorded since August 2005.
The figures come the day after the Land Registry said house prices in England and Wales fell by 0.4% during December, the first decline it has recorded since August 2005.
All the major house price indexes are now showing monthly falls.
All the major house price indexes are now showing monthly falls.
Affordability
Affordability
Separately, the Royal Institution of Chartered Surveyors (Rics) warned that the cost of getting on to the housing market has risen by about 350% from its most accessible point in 1996.
Separately, the Royal Institution of Chartered Surveyors (Rics) warned that the cost of getting on to the housing market has risen by about 350% from its most accessible point in 1996.
Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect David Stubbs, Royal Institution of Chartered Surveyors
Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect David Stubbs, Royal Institution of Chartered Surveyors
It said a first-time buyer couple in the bottom quarter of earnings would now have to save the equivalent of 104% of their joint annual take home pay, or £27,729, to cover the upfront costs of buying a home.
It said a first-time buyer couple in the bottom quarter of earnings would now have to save the equivalent of 104% of their joint annual take home pay, or £27,729, to cover the upfront costs of buying a home.
This was significantly higher than the 23% of annual earnings the same couple would have needed to save in 1996.
This was significantly higher than the 23% of annual earnings the same couple would have needed to save in 1996.
Rics blamed the worsening affordability on the reduction in the loan-to-value ratios lenders were prepared to offer first-time buyers, and the "continued burden" of stamp duty and professional fees.
Rics blamed the worsening affordability on the reduction in the loan-to-value ratios lenders were prepared to offer first-time buyers, and the "continued burden" of stamp duty and professional fees.
"At the start of 2008, first-time buyers are finding it even harder to get a foothold on the housing ladder and the signs are that conditions are unlikely to get better in the short term," said Rics senior economist David Stubbs.
"At the start of 2008, first-time buyers are finding it even harder to get a foothold on the housing ladder and the signs are that conditions are unlikely to get better in the short term," said Rics senior economist David Stubbs.
"Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect.
"Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect.
He said existing homeowners had found it slightly easier to repay their mortgages in the last quarter of 2007 - the first improvement since early 2006 - thanks to stable interest rates and wage increases.
He said existing homeowners had found it slightly easier to repay their mortgages in the last quarter of 2007 - the first improvement since early 2006 - thanks to stable interest rates and wage increases.
"Those who are struggling with mortgage repayments are still faced with paying a large percentage of take-home pay but there may be some release of pressure as earnings continue to rise," Mr Stubbs said.
"Those who are struggling with mortgage repayments are still faced with paying a large percentage of take-home pay but there may be some release of pressure as earnings continue to rise," Mr Stubbs said.
"If the Bank of England cuts interest rates next week, many will breathe a sigh of relief," he added.
"If the Bank of England cuts interest rates next week, many will breathe a sigh of relief," he added.
Struggle
Struggle
Rics also predicted that just under 45,000 people would lose their home in 2008 as a result of high mortgage costs.
Rics also predicted that just under 45,000 people would lose their home in 2008 as a result of high mortgage costs.
This is in line with a similar forecast from the Council for Mortgage Lenders (CML).
This is in line with a similar forecast from the Council for Mortgage Lenders (CML).
The Financial Services Authority (FSA) also warned that a million homeowners could struggle to repay their home loans over the next 12 months if lenders continue to toughen their criteria.
The Financial Services Authority (FSA) also warned that a million homeowners could struggle to repay their home loans over the next 12 months if lenders continue to toughen their criteria.
The Bank of England figures showed that consumer borrowing rose by just under £600m in December, less than half the increase in November, and only half the average of £1.2bn seen in the previous six months.
The Bank of England figures showed that consumer borrowing rose by just under £600m in December, less than half the increase in November, and only half the average of £1.2bn seen in the previous six months.
Consumers spend £11bn on their credit cards in December, but once repayments were taken into account, net plastic lending rose by £292m, the lowest figure since December 1993.
Consumers spend £11bn on their credit cards in December, but once repayments were taken into account, net plastic lending rose by £292m, the lowest figure since December 1993.
The total amount of outstanding consumer debt was £1.4 trillion, of which £1.1 trillion was linked to mortgages.
The total amount of outstanding consumer debt was £1.4 trillion, of which £1.1 trillion was linked to mortgages.
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