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UK Mortgage approvals fell to their lowest ever level in June as
demand continued to decline, with the value of mortgage lending also
shrinking substantially.
Statistics from the Bank of England
today showed approvals for house
purchases fell to just 36,000, a record low since 1999, while
the value of the lending shrunk to £5 billion from £5.8
billion in May.
The number of approvals has almost halved from the previous six
month average of 62,000, and is a further sign of the deteriorating
housing market as consumer confidence evaporates and banks rein in
on their lending.
The Royal Institution of Chartered Surveyors' chief
economist, Simon Rubinsohn, said: 'The latest numbers from the Bank
of England demonstrate in the clearest possible way the consequences
of the credit crunch for the residential property market.'
Rubinsohn said: 'a lack of availability of mortgage finance had
caused the decline in the volume of mortgage approvals, which
represented a fall of close to 70% compared with the same month last
year'.
As well as lending for house purchases, the number and value of
approvals for re-mortgaging and other purposes also reduced, with net
lending secured on dwellings falling to £3.1 billion. The figure
was down from £3.8 billion in May and under half the previous
six-month average of £6.3 billion.
The increase in consumer credit lending to individuals also
slowed, with net credit card lending growing by just £400 million,
below May's increase.
The total rise in net consumer credit of £900 million was less
than May's rise of £1.3 billion and was well below the
six-month average increase of £1.2 billion.
Rubinsohn added: 'Against this backdrop, it is not surprising
that the high street appears under increasing pressure with
consumers scaling back purchases of a range of household goods.
'Unless the authorities take steps to restart the mortgage
market, the likelihood is that there will be more bad news in store
for both the housing market and the retail sector during the latter
part of the year.'
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