MORTGAGE approvals hit a 19-month low in October, according to figures released yesterday by the British Bankers’ Association (BBA).
The number of mortgages fell for the fifth consecutive month, sinking to 30,766 – the lowest since March 2009, down from 31,058 in September.
Lending for house-buyers is now half the level of before the crisis. Until August 2007, the BBA’s monthly figures would regularly hit 60,000. October’s approvals are down 26.9 per cent on the previous year, according to IHS Global Insight’s Howard Archer.
The weakness of the UK housing market was further reflected by a fall in gross mortgage lending to £7.6bn, the lowest total since February 2001 and 16.1 per cent lower than a year ago.
While net lending for house purchases edged up to £1.7bn (from £1.5bn in September) this is still below the monthly average for 2010, which exceeds £2bn. Prior to the credit crunch, net lending would hit £6bn in some months.
The figures pour more misery on the housing market after mortgage data from earlier this month showed a similar decline. Approvals were down two per cent on September according to chartered surveyors e.surv.
Yet there is not equal doom and gloom across the market. “Beneath the surface there is a real two-speed market in operation,” explained e.surv’s Richard Sexton. “Approvals are up for the most expensive properties. The flip side is that approvals for cheaper properties have fallen dramatically.”