Mortgage Approvals are at a record low

Mortgage approvals have dipped to a record low by a whopping 64 percent since last August. According to BBA or British Banker’s Association, Mortgage approvals were at a meagre 21,086 in August. It is the lowest so far with the fall having started in 1997 down from 58,564 in 2007. Mortgage lending in August was £2.1 billion which is less than half in the last six months. The average mortgage lending in the last six months was £4.7 billion. The reason behind such dismal figures is mainly financial pressures on household and strict lending criteria. Government’s announcement on stamp duty has also led to reduced demand in August. These factors would exist for sometime now. According to BBA statistics director, less number of mortgage approvals meant lower gross lending and along with remortgage a reduced net lending amount as well. Looking at the trend, lending has been described as “dismal” by economists. The housing market is suffering mostly because of strict lending conditions. Activity in the housing market is not so great also because of the fact that there are expectations of a fall in house prices and the current financial crisis is also expected to add pressure to the already suffering housing market.

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