‘Subdued’ market sees record low for home loans

Mortgage lending has fallen to a record low, with less than 28,000 house purchases approved in May.

The British Bankers’ Association’s (BBA) monthly report revealed there were 56 per cent less approvals compared to a year ago, with a 20 per cent drop last month alone.

Commenting on the lowest level of house purchases since records began in 1997, BBA statistics director David Dooks said: “Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households.”

He added that remortgaging levels are up, as people are switching to other lenders to find a better deal. The report also showed consumer credit had risen, but only as a result of lower credit card repayments.

On Monday a report by Rightmove claimed that the average asking price for a UK house had fallen by 1.2 per cent in a month, with one million homes now on the market.

© Adfero Ltd

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