Mortgage lending slump continues

Permalink: Mortgage lending slump continues
by Kay Murchie

Figures from the British Bankers Association (BBA) show that mortgage lending slowed further in November indicating that the housing market is cooling.

High Street banks in the UK lent £4.3 billion on mortgages last month - £500 million less than October. The number of mortgage approvals recovered 4% to 44,811 from a record low in October but the figure was 43% below the level of approvals 12 months earlier.

David Dooks of the BBA said mortgage activity is notably lower compared with a year ago. Judging by the significantly lower number of mortgage approvals in October and November, partly resulting from lower demand, partly from tighter supply, it is likely that the market will continue to slow over the next few months.

Howard Archer, chief UK economist at Global Insight, said the weak mortgage data provides further proof that property market activity is now slowing.

Many experts believe the UK property market may follow in the footsteps of the US market which has recently ground to a halt after mortgage applications fell to their lowest level for 12 months.

Furthermore, demand for both home purchases and remortgaging in the US fell during the last fortnight with total loan applications at the start of December down nearly 20%.