Credit squeeze reason for sharp fall in December approvals according to Connells Survey & Valuation

The credit squeeze saw mortgage approvals in December 2007 drop by 43% compared to the previous year, new figures have shown.

The study by Connells Survey & Valuation showed mortgage approvals dropping to 66,000, which was down 21% on November’s level.

In addition to the credit crunch, the poor figures were blamed on a reduction in confidence among home buyers and minor disruption caused by the introduction of Home Information Packs.

Ross Bowen, managing director of Connells Survey & Valuation said: “Unsurprisingly there are no signs that December’s base rate cut has provided a catalyst for improvement and we urge the Bank of England to implement the next cut in rates in February to help start the process of restoring confidence to the markets.”

According to its figures, house prices eased 0.6% in the month to £215,417.

Bowen said: “As the Bank of England’s rate cuts begin to take effect and the cost of borrowing falls, we expect prices to level off before beginning to rise again modestly in the second half of the year.”