Mortgage approvals from UK high street banks remain low

MORTGAGE approvals for house purchases remained near their lowest level for two years, the British Bankers’ Association (BBA) reported yesterday.

The 29,923 mortgage approvals in February were just a slight upgrade from the 29,159 in January and the 23 month low of 29,029 in December.

Mortgage approvals were down about 11 per cent on the year.

However, the annual growth of the main high street banks’ net mortgage lending was 2.5 per cent in February -- substantially ahead of the 0.7 per cent for the whole mortgage market in January, the BBA claimed.

Economist Howard Archer of IHS Global Insight, said: “We believe housing market activity and house prices will remain under pressure for some time to come from high and likely to rise unemployment, negative real income growth, the increasing fiscal squeeze, very low consumer confidence, and ongoing difficulties in getting a mortgage (particularly for first time buyers).”

Archer added that because of the weak housing market, he speculates housing prices will fall by around five per cent in 2011 and end up losing about 10 per cent from the peak levels seen in the first half of 2010.