Dramatic fall in mortgage lending Mortgage lending plummets
01 December 2008
Mortgage lending collapsed during October, diving by nearly 70% to reach the second lowest figure on record, the Bank of England said today.
Just £459 million was advanced during the month, well down on September's £1.49 billion and only 6% of the level for October 2007.
The steep fall was driven by the ongoing shortage of capital banks have to lend.
Number of mortgage approvals stable
However, the number of mortgages approved for house purchase has remained stable for the past four months.
Around 32,000 new loans were approved for people buying a property, only slightly down on September's figure of 33,000, suggesting the market may have bottomed out at a very low level.
Commenting on the figures, Adrian Coles, Director General of the Building Society Association, said: ‘With the depressed state of the housing market, it is no surprise that mortgage lending by building societies remains low, albeit slightly improved in September. With confidence in the market so restrained, homeowners are choosing to stay put rather than move, while first time buyers continue to wait for further falls in prices.’
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