The number of mortgage approvals has fallen to a record low according to figures released by the British Bankers Association (BBA). Mortgage approvals have plunged 64 per cent since August last year.
The British Bankers’ Association (BBA) said mortgages approved for house purchases mortgage approvals declined to just 21,086 in August. This was the lowest level since the series started in 1997 and down from 58,564 in August 2007 when mortgage lending had already started to slow.
The BBA blamed the decline on falling property prices, economic pressures on households, and tighter lending criteria. It said mortgage lending reduced to £2.1 billion in August, which was less than half the average borrowing transacted in the previous six months.
Howard Archer, chief UK and European economist at Global Insight, described the latest set of lending figures as “dismal”.
“The BBA data graphically highlight that housing market activity continues to be throttled by stretched affordability and tight lending conditions.
“Widespread expectations that house prices will continue to fall markedly for some considerable time to come is also significantly limiting housing market activity, as is heightened concern over the economic outlook and job prospects.
“Furthermore, the current financial sector turmoil is likely to deepen the pressure on housing market activity through further tightening credit conditions and exerting upward pressure on interest rates.”
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