Mortgage approvals fall for 13th month in row

30 June 2008

Lowest level for approvals since 1993

Figures released today have shown that the number of mortgages approved for property purchases plummeted in May to record low levels.

According to the Bank of England, 42,000 mortgages were approved in May – 16,000 less than the number approved in April.

This is the thirteenth month is a row in which approval figures have dropped and numbers have plummeted so much that they are the lowest seen since records began in 1993.

The figure for May 2008 was 64% lower than that seen in the same period in 2007.

The Bank of England figures also showed a 10% drop over the course of the month compared to April. In May, 90,000 remortgages worth a total of £12.1bn were approved. The remortgages accounted for nearly two-thirds of the total £18.5bn of mortgages approved during May.

Howard Archer, chief UK economist at Global Insight, said: “The Bank of England mortgage approvals data add to the plethora of data and survey evidence showing that housing market activity is being squeezed tightly by stretched affordability and tight lending conditions.

“Very low housing market activity seems certain to feed through to further depress already markedly weakening house prices,” he added.