Mortgage approvals 'sinking fast'

Posted: 24 Sep 2008 13:40:21 GMT

August saw mortgage approvals plunge to an all-time low, the British Banking Association (BBA) has revealed.

Overall, approvals for property purchases fell by 64 per cent year-over-year in August, with net mortgage lending rising by just £2.1 billion in August; less than half the average rise over the last six months.

The banks made clear that falling house prices, a poor economic climate and speculation over the government's plans for stamp duty had put the market on hold last month and will continue to have an affect for some time.

The number of remortgages also fell to 47,765 compared with a six-month average of 66,626.

"Monthly fluctuations in consumer credit and deposits reflect the behaviour of families repaying as much as they spend on credit cards and using their current accounts for expenditure," said David Dooks, statistics director at the BBA.

In the first week of September, the chancellor, Alistair Darling, announced government plans to suspend stamp duty on properties costing up to £185,000 for the next 12 months.

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