Mortgage Lending Drop in UK
Tuesday, December 23, 2008, there is another problem in mortgage loan subject. UK mortgage lending by the major banks has fallen sharply, with approvals for house buys 60% lower than a year ago, figures show.
The number of mortgage approvals for house buys fell by 14% in November to a new low of 17,773, according to the British Bankers’ Association (BBA).
As a result, the amount consumers are borrowing also remained subdued.
The number of people re-mortgaging but staying in their existing home also dipped significantly in November, with homeowners unable to find a better deal to switch to.
This fell to 29,798, nearly half of the 52,452 of the previous month, and the lowest for eight years.
Mortgage lenders withdrew a number of deals from the market and assessed what they were offering in November after the shock 1.5 percentage point cut in interest rates by the Bank of England.
Potential buyers also held off to see what effect the Bank rate cut would have, the BBA said.
With house prices still falling and people waiting to see whether mortgages would get significantly cheaper, activity in the mortgage market remained stagnant.
“People remain concerned about the impacts of the rapidly slowing economy on their personal finances,” said BBA statistics director, David Dooks.
Liberal Democrat Treasury spokesman Vince Cable said that the figures showed there was a “very serious problem” with mortgage supply.
“It is understandable that people are not willing to buy in a falling market but the figures suggest that there are people who would buy if mortgages were available on reasonable terms,” he said.
“The government and the mortgage industry will have to come up with thoughts on how to restore responsible lending.”
The Conservatives claimed the bank bail-out package was failing to revive the housing market.
With prices falling and banks demanding a larger deposit from buyers, the average amount borrowed by home-movers has also been falling.
In November, the average amount borrowed was £117,000, down nearly 24% on a year ago.
The trends showing a lack of activity in the housing market, reported by the BBA, were confirmed by the latest provisional figures for November from HM Revenue & Customs (HMRC).
Its seasonally adjusted figures showed that residential property sales were down in November to 53,000 in the UK. That is lower than the previous month and 60% down on the same month a year ago.
Related Financial Planning Posts
Tags: Bank of England, British Banker's Association (BBA), Financial News, Financial News, HM Revenue & Customs (HMRC), Liberal Democrat Treasury, mortgage approvals, mortgage industry, mortgage lenders, Mortgage lending, mortgage loan, Mortgage or Home Loans, mortgage supply, personal finance, re-mortgaging, The ConservativesTags: Bank of England, British Banker's Association (BBA), Financial News, HM Revenue & Customs (HMRC), Liberal Democrat Treasury, mortgage approvals, mortgage industry, mortgage lenders, Mortgage lending, mortgage loan, mortgage supply, personal finance, re-mortgaging, The Conservatives
Top incoming search terms for this post
mortgage, - computers internet blog, - home financial, - loan in uk, -