New home loans down by 71 per cent

Last Modified: 01 Sep 2008
Source: ITN

The number of mortgages approved for people buying homes dived by 71 per cent during the past year to hit a new record low, figures show.

Just 33,000 mortgages were approved for house purchase during July - 6 per cent fewer than in June, and down from 114,000 in July last year, according to the Bank of England.

Pipeline loans for people remortgaging also continued their downward trend, dropping to 69,000 during the month, a 14 per cent slide compared with June's approvals figure.

Meanwhile the Building Societies Association said the continued economic uncertainty had contributed to the amount of money saved with building societies doubling during July, compared with the same month of 2007.

Net receipts to building societies totaled £1.44 billion during the month, up from £723 million in July last year.

But net mortgage lending was negative for the second month running, meaning that repayments and redemptions on existing mortgages outstripped lending through new ones.

Net lending during July was minus £79 million, well down on a positive figure of £506 million in the same month of 2007, but better than June's level of minus £526 million.

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