Mortgage approvals down in September

Permalink: Mortgage approvals down in September
by Kay Murchie

According to the British Bankers’ Association, the number of new mortgage approvals for house purchase fell by 27% last month to 52,685 from 72,155 compared with the same month last year.

The BBA said mortgage lending was the lowest since September 2000 and said the crisis at Northern Rock, 5 interest rate hikes and the credit crunch was to blame.

David Dooks of the BBA, said lower amounts of new mortgage lending and fewer loans approved for house purchase imply a weaker outlook for the mortgage market, especially if loan supply reduces in the upshot of the recent financial markets’ difficulties and borrowing costs remain at current levels.

These figures follow recent warnings from the International Monetary Fund (IMF), the world’s leading economic institution, saying that it is likely that the credit crunch will have a huge impact on house prices and could prompt a slump.

If the figures are backed up by those from the Bank of England next week, it will confirm that the market is slowing considerably.

Just last week, the Council of Mortgage Lenders (CML) revealed that the total value of mortgages approved in September was down by more than £4 billion in August to £29.96 billion, a decline of 12%, suggesting a housing market slowdown.