Mortgage approvals hold near record low in July
Mortgage approvals for house purchases remained near a record low in July and the British Bankers' Association said there was no sign yet of a property market recovery.
Mortgage approvals reach all time low in DecemberThe BBA said mortgage approvals totalled 22,448 last month, 65 percent lower than in the same month last year. That was only fractionally higher than June's series low of 22,369 and almost 12,000 below the average of the previous six months.
Total mortgage lending amounted to 4.3 billion pounds in July, unchanged from June but also below the previous six-month average of 4.8 billion.
House prices have shed around 10 percent since last August after a decade in which property values almost trebled.
With unemployment also rising and a recession looming, banks have tightened their lending criteria. Many now refuse to offer mortgages to homebuyers with less than a 25 percent deposit.
"The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low," said BBA statistics director David Dooks.
In a further sign of the pain inflicted on the housing sector, Britain's Bovis Homes reported a slump in first-half profits on Tuesday and said trading conditions in recent months had been the toughest it had ever experienced.
A report from ratings agency Standard & Poor's showed the number of Britons failing to meet mortgage repayments rose significantly in the second quarter.
"With no sign of credit conditions easing and house prices continuing to fall, we expect delinquencies to continue rising and losses to increase over the coming quarters," said S&P credit analyst Kate Livesey.
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