Mortgage approvals more than halve
Updated on 25 November 2008
Mortgage approvals more than halved in October compared to a year earlier, the British Bankers' Association has said.
The BBA said mortgage approvals totalled 21,584 last month, compared with 23,383 in September and August's record low of 21,363. October's figure was 52 per cent down on 2007.
Net mortgage lending, which strips out redemptions and repayments, was £2.9 billion in October, down from £3.5 billion in September. The figure was well down on the £4.73 billion which was advanced during October 2007, and was also the second lowest sum recorded since April 2001.
BBA statistics director David Dooks said: "Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing.
"Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October."
On a brighter note, the BBA figures also showed that total mortgage advances rose by 3 per cent during October to £11.9 billion, although this was still 38.2 per cent lower than during the same month last year.
There was also a slight increase in the number of loans approved for people remortgaging, with this rising to 52,425 compared with 51,707 in September.
Mortgages approved for people withdrawing equity or taking out buy-to-let loans remains subdued at 23,645, 5 per cent fewer than during the previous month.
The figures come after a Treasury document made public yesterday revealed that new net mortgage lending is likely to fall below zero in 2009.
Meanwhile, the BBA said people spent £7.1 billion on their credit cards during October, the same as in September, but repayments continued to outstrip spending at £7.3 billion, according to the BBA.
As a result, once interest and charges were taken into account, outstanding credit card debt rose by £248 million.
But borrowing through overdrafts fell slightly, while demand for personal loans remained weak at £1.9 billion, 26 per cent less than a year earlier. The amount people had saved also remained flat during the month.
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