Mortgages Uncovered

The BBA say that they are not surprised about the dropping level of mortgage approvals, the figures only go to show the continuing weakness in the housing market with plummeting sales and house prices with rising interest rates.

”Compared to a year ago, the mortgage environment has changed significantly, with supply restricted as a consequence of the situation in financial markets and demand at a much reduced level,” said the BBA’s statistics director, David Dooks.

”Pressure on household budgets, the slowing economy and fragile consumer confidence are suppressing consumer appetite for unsecured borrowing, but personal deposits across the high street banks held up.”

Simon Rubinsohn, RICS chief economist commenting on the figures, said: “The slight month on month rise in September is consistent with the pick-up in new buyer enquiries in the RICS monthly housing market survey indicating that opportunist buyers are still on the lookout for bargains.

“Many first time buyers have been denied access to the market, due to insufficient funds but the government’s rescue plan may go some way to kick start mortgage lending. However, as the country teeters on the brink of recession and the employment picture deteriorates, mortgage lending is unlikely to see a recovery in the near term.”

Even though it was anticipated, the sheer intensity of the slump in the mortgage market has surprised everyone. It is apparent that mortgage lending at the beginning of 2007 was very cheap and an impact was due from this, even so it has been quite a tough lesson to learn for us all.

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