Mortgage Approvals at New Low
The number of new mortgages approved for house purchase has fallen again, to a new low.According to the Bank of England, there were 42,000 mortgages approved in May, 28% lower than April, and 64% lower than a year ago.
This is the lowest since the Bank began reporting the figures in 1993 and the number of approvals has now fallen for 13 consecutive months.
Philip Shaw, chief economist at analysts Investec, described the figures as "terrible".
The Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors have warned that property sales this year would fall by between 35% and 40%. The Land Registry revealed last week that the number of house sales slumped by 50% in March compared with the same month in 2007."They are clear evidence in the change in attitude among mortgage lenders and home buyers," said Ed Stansfield, of Capital Economics. "People no longer want to borrow and those that do want to borrow are not being allowed to by the lenders.
"The implications of this is that the market is going to remain pretty weak for some time with a significant downward movement in house prices. We are off the scale. We have never been anywhere near as low as this in activity levels and mortgage approvals."
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