Mortgage approvals at 15-year low
Jul 25 2012
Mortgage approvals slumped to their lowest number in at least 15 years last month, a high street banking report has said.
There were 51,610 mortgage approvals in June worth £6.5 billion, the lowest number of approvals the British Bankers' Association (BBA) has on its records, which stretch back to September 1997.
Within these figures, there were 26,269 approvals for house purchase worth £4.2 billion, the lowest number since January 2009. House purchase approvals are a fifth lower than they were a year ago.
There were just over 14,000 approvals for re-mortgaging, worth £1.9 billion, well below the longer-term average which is close to 20,000 approvals.
The BBA said the public holidays for the Diamond Jubilee and the impact of the wet weather on buyer activity affected the figures while the appetite for borrowing among consumers remained weak in the "subdued" housing market.
Lenders have also been tightening their borrowing criteria in recent months and raising their rates for new borrowers and more than a million existing ones, blaming the weak economy and the increased cost of funding a mortgage. The Bank of England expects borrowers with lower deposits to have a particularly tough time taking out a mortgage in the coming months.
BBA statistics director David Dooks said: "Public holidays and wet weather put a damper on mortgage approvals in June and demand for unsecured (non-mortgage) borrowing was also low. Paying off loans or overdrafts and building up deposits is the current consumer ambition." The BBA reported last month that mortgage payments had outstripped lending for the first time, as net mortgage lending declined by around £70 million.
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