Mortgage lending slumps
Updated on 29 September 2008
Mortgage lending dived to £143 million in August - just 5 per cent of the previous month's total.
The Bank of England said it was the lowest figure recorded since it began logging the data in 1993.
The Bank did not offer an explanation for the slide but it is almost certainly caused by the combination of falling house prices putting people off moving and the credit crunch making it hard for potential buyers to raise the mortgage they need.
Speculation over the Government's recent stamp duty announcement is also thought to have caused people to delay making a purchase during August until the future of the tax was clearer.
The Government finally announced at the beginning of September that it was scrapping stamp duty for one year on properties worth up to £175,000.
Paul Dales, UK economist at Capital Economics, said: "It is possible that the suspension of stamp duty for properties costing less than £175,000 at the start of September will support approvals in the coming months.
"But we are not convinced. Why would households borrow to buy an asset that might soon be falling in price by around 25 per cent per year?"
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