Fears of a housing market crash in the UK heightened today as annual mortgage lending in May plunged by 56 per cent to a record low.

Figures from the British Bankers' Association (BBA), reveal that monthly mortgage approvals fell 20 per cent from 34,752 in April to 27,986 in May, below a six-month average of 40,570.

Compared to last May, mortgage approvals fell by 56 per cent over the year.

The number of re-mortgage loans approved also slipped, falling from 68,971 in April to 63,303.

The total net value of loans approved rose by £4 billion, down from £5.2 billion in April.

Howard Archer, chief UK and European economist at Global Insight, said today's figures will increase concern that "we are in for an extended, deep correction in the housing market."

The Times