Mortgage approvals plummet 66%

The number of mortgage approvals for house purchases has fallen dramatically in the last year, new research has revealed.

According to figures from the British Bankers' Association (BBA), approvals from its members dropped by over 65 per cent in May when compared to the same month in 2007.

This puts approvals at the lowest level they have been for over ten years.

UK lenders approved mortgages worth £3.3 billion, which is 66.4 per cent lower than last year, indicating that more people will be looking to rent rather than buy property.

This equates to 21,118 loans over the last month, a drop of 67 per cent on the figure reported for May 2007.

David Dooks, statistics director at the BBA, commented: "Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990s."

Mr Dooks went on to say that net lending has actually increased by 12 per cent in the last year and added that "significant numbers" of people are approaching banks to remortgage their properties.

Recently, the Financial Services Authority warned UK lenders to guard themselves more carefully against mortgage fraud.

Published 25th July, 2008

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