Housing Market Cooling?

The British Banking Association (BBA) would have us believe that the housing market is beginning to cool as mortgage approvals for new homes fell for the fourth consecutive month in May, to its lowest level since last August.

Data from the British Banking Association showed that mortgage lending grew by £1.2BN in May, down from a £1.3BN in April.

Mortgage approvals totalled 41,757 in May down from 41,834 in April.

The BBA's chief economist Richard Woolhouse is quoted by the Telegraph:

"Our figures indicate that the heat appears to be coming out of the housing market.

These are the first mortgage approval figures we have seen since the introduction of the Mortgage Market Review, so it is significant they have fallen for the fourth row in a month."

Maybe so. However, a reduction in approvals of 77 hardly constitutes a collapse!

Let us see more data in the coming months before concluding that the market is cooling.