Signs of a further slowdown in the housing market in figures released by the Bank of England (BoE).
The data showed that net borrowing of mortgage debt by individuals decreased from £4.3bn to £3.2bn with mortgage approvals for house purchases tumbling to 35,600 in December from 46,200 in November, the lowest since May 2020.
City pundits had expected a fall of 45,000.
Chart: Mortgage lending
The ‘effective’ interest rate, the actual interest rate paid, on newly drawn mortgages increased by 32 basis points, to 3.67% in December, the report said.
Consumers also borrowed an additional £0.5bn in consumer credit, on net, compared with £1.5 billion borrowed in November.
Chart: Consumer credit
Credit card repayments of £0.5bn were more than offset by £1.0bn of borrowing through other forms of consumer credit.
Shares in leading housebuilders came under pressure with the data adding to downbeat market mood. Persimmon PLC (LSE:PSN) (Persimmon PLC (LSE:PSN)), Redrow PLC (LSE:RDW) (Redrow PLC (LSE:RDW)) and Bellway PLC (LSE:BWY) (Bellway PLC (LSE:BWY)) were amongst those heading downwards.