Mortgage loans approvals fall to lowest level ever

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by Kay Murchie

Figures from the Bank of England today have revealed that the number of new mortgages approved for house purchases has fallen by 68.4% in the year to June - the lowest level since records began in 1993.

The Bank said mortgage approvals fell from 41,000 in May to 36,000 in June. The number of mortgages approved has now fallen for 14 consecutive months, according to the Bank.

The latest figures are an indication that the housing slowdown continues as the Land Registry confirmed yesterday that house prices in England and Wales fell 1% between May and June - the tenth monthly consecutive fall in house prices.

As a result of the credit crunch, the availability of mortgages have all but dried up and first-time buyers have been unable to secure a mortgage unless they are able to provide a significant deposit.

According to many analysts, the latest mortgage figures indicate that house prices have further to fall over the next few months.

Commenting on the figures, Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said steps must be taken to kick-start the mortgage market.

An assessment of the outlook for mortgage finance has been published today by Sir James Crosby, deputy chairman of the Financial Services Authority.