New mortgage approvals decline 66% year-on-year

The British Bankers’ Association (BBA) has released figures for mortgage lending in June, showing that the number of new home loans approved by the UK’s leading lenders fell 23% in a month.

In May, BBA members approved 27,499 new home loans but the figure declined to 21,118 in June, representing a 66.9% fall on the same period of 2007.

The annual fall is the most marked since the BBA’s records began in September 1997 and is evidence that the downturn in the UK’s housing market is gathering pace.

The BBA’s director of statistics, David Dooks, believes that the credit crisis and slowing property sales mean that the entire mortgage market is likely to become at its least active since the early 1990’s.

However, Mr Dooks points out that net lending has grown by 12% over the past year and that there continue to be significant numbers of people remortgaging.

Other figures from the BBA for June reveal subdued consumer borrowing, with spending on cards falling and borrowing on personal loans and overdrafts weakening.

Discuss this in the Finance Markets forums

Story link: New mortgage approvals decline 66% year-on-year