The number of mortgages approved for house purchases fell to a record low in July and is down 71% on the same period last year, figures showed today.
The Bank of England said 33,000 home loans were approved for purchases during the month, down from 35,000 in June and markedly below the previous six-month average of 55,000.
This is the lowest level of purchase approvals recorded since comparable records began 25 years ago.
The value of mortgages taken out to fund property purchases plummeted over the three months to July, from £7.5bn in April to just £4.3bn.
The number of remortgages also dropped from 80,000 in June to 69,000 in July. This figure is also below the previous six-month average of 96,000.
According to the Bank's figures, a total of £3.2bn of loans secured on properties was advanced during the month, slightly more than June's figure of £3.1bn but still well below the £9.3bn advanced in July 2007.
Separate figures from the Building Societies Association (BSA) show the number of loans approved by societies reaching a new low in July.
Building societies approved £2.5bn worth of new mortgages over the month, compared with £3.9bn in July 2007.
While gross lending by societies totalled £3.3bn, when repayments and mortgage redemptions were taken into account lending was -£79m, compared with £506m last July.
The BSA's director general, Adrian Coles, said both buyers and lenders were approaching the housing market with caution.
"Recent falls in house prices have been widely publicised, reducing potential buyers' confidence and keeping them out of the market," he said.
"And with societies seeking to maintain high quality loan books, societies have chosen to follow a policy of conservative lending that has further reduced the amount of mortgage business they have undertaken." |
