Mortgage approvals fall

Posted 2008-04-22

New figures released by the British Bankers Association (BBA) have revealed that 35,417 new mortgages were approved in March, a 46 per cent fall on a year ago.

The figure is the lowest recorded since September 1997 and overall mortgage approvals, which include equity withdrawal and refinancing, fell to their lowest since 2000.

David Dooks, BBA statistics director, believes the tightening of conditions by banks, coupled with pressure on personal finance, have had an effect on the demand for mortgages as well as loans and credit cards.

"The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals," he stated.

BBA figures show that the average loan approved for a house purchase decreased by 4.8 per cent from March last year, to £158,000.

The Royal Institute of Chartered Surveyors believes the credit crunch will continue to affect the residential property market.

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