Mortgage approvals fall to their lowest in 17 months as unsecured borrowing leaps

Emma Haslett
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Analysts had expected a more modest fall in lending (Source: Getty)

The Bank of England's Mortgage Market Review (MMR) continues to wreak havoc on mortgage lending. Figures published this morning showed approvals fell to 37,100 in October, their lowest level in 17 months in October.

Analysts had expected the British Bankers' Association's (BBA) high street banking statistics to show a more modest fall from September's 39,300 figure, but the BBA said although the "bottleneck" caused by the the MMR earlier this year had eased in June, "recent figures indicate that overall numbers have slowed".

The "cooling measures" introduced as part of the MMR include "stress tests", and limiting loans to 4.5 times borrowers' income. In September, BBA figures showed the number of mortgages approved by banks had fallen 10 per cent, while Nationwide's half-year results, published this morning, showed it had lent almost £1bn less in mortgages than during the same period last year.

Elsewhere, the figures showed that despite vows by politicians to halt the UK's culture of borrowing in the aftermath of the financial crisis, unsecured borrowing rose 2.8 per cent in October, its highest rate since 2008.

But it wasn't all bad - the high street banking statistics, published by the British Bankers' Association (BBA) today, showed Britain is also becoming a nation of savers. Isa deposits rose to £11.2bn in the 12 months to October, a whopping 22 per cent increase on the same period last year, which the BBA attributed to a change in rules governing Isas. In July, the government allowed savers to split their balances between cash and stocks and shares Isas.

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