Big Drop In Mortgage Approvals Posted on August 26th
2:43pm UK, Tuesday August 26, 2008
The number of mortgages approved for house purchase in July was nearly two-thirds lower than a year earlier, new figures show.
Around 22,448 new loans for people moving home were approved during the month.
That is 65% fewer than in July 2007 but largely the same as the previous month.
Net mortgage lending, which strips out redemptions and repayments, also levelled out at £4.3bn, the British Bankers’ Association said.
Statistics director David Dooks said: “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.”
Earlier Bovis Homes announced an 80% drop in pre-tax profits for the first six months of the year to £11.7m, blaming the credit squeeze.
The builder said it sold private homes for an average of £196,700 - 4% lower than in the first half of 2007.
“The UK housing market has been badly impacted during 2008 as mortgage availability has reduced, following financial market turmoil in the second half of 2007,” it said.
“As the vast majority of potential customers in the market require mortgage finance, this has had a negative impact on the group’s levels of reservations and legal completions.”