13 January 2009
A recently released report has shown that mortgage lending in the UK has shrunk yet again, with figures indicating that the level of mortgage approvals is now around 60 percent lower than it was for the same period last year. Mortgage approvals have plummeted over the course of this year with banks too wary to lend money in the current financial climate, and many consumers too wary to apply for a mortgage and buy a property because of the ongoing falls in house prices, which could leave them open to negative equity.
The number of mortgages that were approved for house purchases in November of this year is said to have fallen by round 14 percent, taking them to fewer than eighteen thousand. The data comes from the British Banker’s Association. The BBA also added that the amount that consumers were borrowing was also at low levels, with many worried about their finances and the economy in general and with consumer confidence at close to record lows.
Vince Cable from the Liberal Democrats said that some people would take out mortgages if they could find them at affordable rates but that mortgage supply was very low at present.
He said: “It is understandable that people are not willing to buy in a falling market but the figures suggest that there are people who would buy if mortgages were available on reasonable terms. The government and the mortgage industry will have to come up with ideas on how to restore responsible lending.”
The average mortgage for home movers in the month of November was around £117,000 according to the figures. BBA statistics director, David Dooks, stated: “People remain concerned about the impacts of the rapidly slowing economy on their personal finances.”
Tags: mortgages