Mortgage approval fall.

Mortgage approvals fell to the lowest level in more than two years in November, as high inflation and increased borrowing costs strain household spending.

Data from the Bank of England showed approvals for house purchases fell to 46,100 in November, down from 57,900 the previous month, to the lowest level since June 2020, when the Covid-19 pandemic brought the housing market to a standstill.

Andrew Wishart, a senior property economist at Capital Economics, said he did not expect the «modest drop back» in mortgage rates to have much effect in a depressed housing market.

«A further decline in mortgage rates and a significant correction in house prices will be necessary before mortgage lending and activity can recover,» he said.

The rise in mortgage costs follows a string of interest rate increases by the central bank as it tries to tackle high inflation.

The BoE warned that further tightening of monetary policy was likely when it raised interest rates in December by half a percentage point to 3.5 per cent, the highest level in 14 years.

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