There has been a slowdown in the mortgage market due to the unstable credit economy in the last year. The UK mortgage market is seeing that in December and much of last year the UK residents have been having issues regarding their mortgages, and the lenders are beginning to cut back on the applications.
Until recently lenders were willing to award mortgages to almost anyone, good or bad credit. They were willing to take the risk in order to make a profit that was there. This has of course come back to haunt them as many are now having trouble paying their mortgages.
The Bank of England has seen a decrease in approvals from 81,000 to 73,000 in just two months, at the last part of 2007. You will see when looking back that 100,000 approvals were made prior to November, but with the scare of a credit crunch these numbers are continuing to fall. The bank also says the interest rates are where some of the problem is going to be. A survey has shown that the inflation is expected to rise 3.3 percent in the next year, which directly effects the economy and the amount of income UK residents will have to spend.