Mortgage approvals down 60%

Mortgage approvals down 60%

The British Bankers’ Association (BBA) has reported that UK mortgage lending fell sharply in November.

Approvals for house purchases were down 14% on October and 60% year-on-year, to a record low of 17,773.

The average amount borrowed was £117,000, down nearly 24% on November 2007.

Meanwhile, remortgaging approvals fell in volume to 29,798, compared with 52,452 in October.

The BBA attributes the dramatic shift to borrowers being forced to remain with existing lenders because of a lack of attractive deals in the market, which was reeling from the surprise 1.5% cut in the Bank of England’s base rate at the beginning of November.

According to the BBA, the cut is also likely to have had an affect on potential buyers, some of whom will have delayed a purchase to wait and see the full effects of the rate reduction.

The BBA’s statistics director, David Dooks, adds that people are also concerned about the impact of the rapidly slowing economy on their personal finances.

Last week, the Council of Mortgage Lenders (CML) reported that gross mortgage lending in November stood at around £14.6 billion.

The value of home loans provided by CML members had fallen 22% on October and 51% on November of 2007.

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