Mortgage Lending Remains Low

Date:

Tuesday 24th August 2010

Mortgage lending remained disappointingly low in July, preventing many prospective property purchasers from buying a new home, according to fresh data released by the British Bankers' Association (BBA).

Just £1.95bn in mortgage lending, excluding redemptions and repayments, was issued by the major banks - the second lowest level since February 2001.

The volume of mortgages approved in July also dropped for the second month in succession - down 2.5% month-on-month to 33,698. This represents a significant fall on the 45,415 mortgage loans issued in December.

Despite the recent abolishment of home information packs, the BBA said that there had been no major increase in the number of people seeking to buy a property with the aid of mortgage finance.

David Dooks, director of statistics at the BBA, commented: "The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals."

Mr Cooks comments were supported by new figures released by HM Revenue & Customs, but differ with data supplied by the Council of Mortgage Lenders for July.

What House? Comments: ‘Mounting concerns regarding government spending cuts and potential job losses is naturally placing added pressure on prospective property purchasers. However, the excessively high deposits required to access the best mortgage deal is not helping people in their quest to secure mortgage liquidity. The government must tackle this issue urgently if they want to improve activity in the housing market.'