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Mortgage approvals at fresh low

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Date: Monday 01 Sep 2008

LONDON (ShareCast) - Mortgage approvals have tumbled to the lowest ever recorded by the Bank of England, with just 33,000 home loans approved in July.

Analysts thought the figure would fall for the 12th month in a row, but the 71% plunge was more than the drop to 35,000 they’d predicted.

Today’s number is the worst since the central bank started recording data back in 1993 as banks tighten their lending criteria following the credit crunch.

But interest rates are still expected to stay on hold at 5% when policymakers meet later this week. Most predict a rate cut at the beginning of next year as inflation starts to ease back.

Just 36,000 home loans were approved by lenders in June, down from 41,000 the month before and 114,000 reported a year earlier.

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