Mortgage lending weakened again last month as housing transactions became more tortuous and housebuilders resorted to ever more desperate measures to attract buyers, a range of economic data showed yesterday.
The British Bankers Association said mortgage approvals for house purchase fell from 27,499 in May to 21,118 in June, 67% below numbers a year earlier. Net mortgage lending rose £3.8bn, well below the six-month average of £5bn.
David Dooks, BBA statistics director, said the figures implied that the whole market, including non-bank lenders, would be at its least active since the early 1990s.
A survey by the Bank of England’s regional agents showed how severely uncertainty over house prices was exacerbating the housing market slowdown sparked by tighter credit conditions.
Some estate agencies reported that up to two-fifths of transactions were falling through, whether because sellers had refused a lower offer, lenders withdrawn a mortgage offer, or buyers pulled out through fear of losing capital.
Financial Times, The Times
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