BBA: Mortgage approvals fall by two thirds

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by Kay Murchie

The doom and gloom in the housing market continues as figures released today from the British Bankers Association (BBA) revealed that the number of mortgages approved for house purchases increased marginally from 22,369 in June to 22,448 in July.

However, this represents a fall of 65% on last year and it is believed that the annual fall in approvals is the largest ever recorded by the BBA.

Meanwhile, for those re-mortgaging, mortgages approved fell from 58,624 in June to 54,532 in July, this represents a fall of 21% compared with this time last year.

The figures suggest that the housing market is a long way from recovering according to David Dooks, the BBA’s statistics director, as overall approval activity continues to be low.

The BBA, whose members make up approximately two-thirds of mortgage lending, added that since the credit crunch, borrowers are finding out increasingly difficult to obtain a loan and this has deterred prospective buyers from purchasing a home.

Another reason for the fall in mortgage lending is due to pressure on household finances due to rising food and fuel costs, which has also added to families acting prudently and not wanting to overstretch themselves, added Mr Dooks.

Recent figures from the Council of Mortgage Lenders revealed that gross mortgage lending slumped by 27% last month compared with July 2007.