Bank mortgage lending falls 20%

Mortgage lending for house purchase by the UK’s main banks has fallen to its lowest level on record.

The British Bankers Association (BBA) said that in May, the number of new mortgage approvals to home buyers fell to just 28,000.

That was a 20% fall in just one month and 56% down from May last year.

The BBA said the number of new approvals was the lowest since its records started in 1997 and warned that the market would stay subdued.

“Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households,” said David Dooks of the BBA.

“Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders,” he added.

BBA members account for about two-thirds of total UK mortgage lending.

mortgage market shrinking

The mortgage market is shrinking under the impact of the continuing problems in the banking system, say lenders.
Figures from the Council of Mortgage Lenders (CML) show that new loans for home buyers fell to 50,300 in January, the lowest level for nine years.