BBA reports further fall in mortgage lending

| October 25, 2010
BBA reports further fall in mortgage lending

The British Bankers’ Association (BBA) has today revealed a further fall in the number of new mortgages approved by the major banks in September.

Mortgage lending slumped to its lowest level in a decade in September, while mortgage approvals dived to an 18-month low, said the BBA.

Net mortgage lending by the major banks totalled £1.6 billion in September – representing the lowest figure since October 2000.

Today’s figures suggest the mortgage market will continue to be subdued over the coming months.

The Government’s Spending Review will also undoubtedly hamper the housing market as prospective buyers will remain cautious, according to experts.

Last week, the Council of Mortgage Lenders (CML) revealed gross mortgage lending totalled £12 billion in September – the lowest September total since the year 2000.

According to the CML, gross mortgage lending fell 1% on the month and was 7% lower than in September 2009.

In related news, HM Revenue & Customs (HMRC) recently revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 85,000 homes worth at least £40,000 or more were sold in the month – the first significant fall this year.

There is little good news surrounding the housing market currently and many experts expect house prices to fall in the coming months. Experts have warned that lending could slow “more significantly” in the months ahead.

House prices are also expected to fall – the latest Halifax House Price Index showed a 3.6% slide in the value of the average home in September, taking the annual rate of gain down to only 2.6%, and the International Monetary Fund has warned that UK house prices could be in line for “further correction”.

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