Sponsored by Digital Look Events

Mortgage approvals slump again

News for Spread Betters

PreviousPrevious
NextNext

There's a new Investor Edition of CMC Markets' spread betting platform... and it's exclusive to DigitalLook.com users...

Get full details about Marketmaker:Investor Edition here. Advertisement

Date: Wednesday 23 Apr 2008

LONDON (ShareCast) - Mortgage lending has tumbled to its lowest monthly figure since 1997 as banks run out of money to lend to prospective home buyers.

Just 35,417 new mortgages were approved for house purchases in March, 18% lower than in February, the British Bankers' Association (BBA) said. It is the worst reading since the BBA started compiling approvals data.

The total value of the mortgages approved for house purchase, which now make up just 27% of all new home loans being approved, was 44% lower than in March last year. Including re-mortgages and equity withdrawal, new mortgages were 15% down on a year ago at 129,300.

"The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals," said David Dooks of the BBA.

"Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on cards," he added.

Net mortgage lending, which strips out redemptions and repayments, totalled £5.1bn, down from £5.5bn in February.

On Monday, the Bank of England announced plans to inject at least an extra £50bn into the banking system to kick start the interbank market by allowing banks to swap existing mortgage debt for government-backed bonds.