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Mortgage approvals at 13 year low | Mortgage approvals at 13 year low |
(30 minutes later) | |
The continuing decline in activity in the UK property market has been underlined by the latest Bank of England figures on mortgage lending. | |
The number of new mortgages approved for house purchase fell slightly in February to just 73,000, said the Bank. | |
That was a 39% drop on the same month a year ago, and leaves prospective mortgage lending at its lowest level for 13 years. | |
Housing equity withdrawal also slumped in the last quarter of 2007 to £7.3bn. | Housing equity withdrawal also slumped in the last quarter of 2007 to £7.3bn. |
The figures illustrate the rapid contraction of mortgage lending due to high prices driving away first-time buyers, and the credit crunch which has made it more difficult for banks and building societies to raise the money needed to lend to customers. | |
Borrowing for house purchase has gone through a sharp slowdown since last summer and the bank's figures also show that remortgaging, which has been more buoyant recently, also dipped in February. | |
That month the number of new loans approved for people who are staying put, but moving their mortgage deals to new lenders, fell to 111,000 from 118,00 in January. | |
Home owners have also become less keen to cash in on the inflated value of their homes to spend on other things. | |
With house prices now falling in many areas, equity withdrawal in the last quarter of 2007 fell by 33% compared to the previous three months, and was down by nearly half on the same period twelve months before. | |
It is now at its lowest level for nearly three years. |