BBA: Mortgage approvals continue downward trend

| November 23, 2010
BBA: Mortgage approvals continue downward trend

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

According to the BBA, the number of new mortgages approved in the month fell to 30,766, down from 31,058 in September – representing the lowest level since March 2009 – when the country was in the midst of its worst recession in decades.

The figures confounded analysts expectations of a rise to 31,300 and continue to suggest that the mortgage market will remain 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.

Commenting on today‘s figures, BBA statistics director, David Dooks said, “Activity in the mortgage and consumer credit markets continued to be subdued in October, reflecting uncertain prospects for households and lower consumer confidence.”

Last week, the Council of Mortgage Lenders (CML) reported mortgage lending remained weak in October.

The figures suggest that the ongoing lack of mortgage availability, particularly to first time buyers, will continue to put pressure on house prices.

In addition, new instructions continue to outstrip buyer demand, which is, in turn, putting downward pressure on prices.

In related news, a report from the BBC over the weekend said banks and building societies do not expect any significant recovery in mortgage lending in 2011.

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