New low for mortgage approvals
August 6, 2008 – 6:03 amAccording to recent figures June has seen the level of mortgage loan approvals for the purchase of property fall to a new low. Whilst May saw mortgage approval figures fall by a significant level, June has seen mortgage approval figures fall to a new record low, after falling another 23%. The figures have come from the British Banker’s Association, with officials stating that mortgage approvals fell from 27,499 in May to just 21,118 in June.
The figures for this June reflect a drop of a massive 64% compared to June of last year. Tighter mortgage conditions have come into play since the onset of the global credit crunch, which have affected mortgage approval levels, with lenders offering fewer mortgages and being more stringent about who they will lend to. Many people are also holding off taking out a mortgage even if they can get one, as they are nervous that house prices will continue falling after they have made the purchase.
Officials from the British Banker’s Association have also predicted that the number of homes sales for this year will fall to the lowest levels since the dark days of the early 1990s, when house prices last crashed. One BBA official said: “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.”
An official from the Royal Institute of Chartered Surveyors added: “The continuing lack of availability of mortgages is proving a major drag on the level of property transactions and is increasingly being felt in the real economy. The modest cuts in the costs of borrowing seen over the past few weeks will unfortunately provide little relief for first-time buyers.”
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