This month has begun with a reflection on the recent slump in mortgages. New mortgage approvals fell to the lowest recorded level in April, as published by the Bank of England.The Bank of England said approvals for new home loans fell to 58,000, the lowest since the data were first published in 1993, sparking fears of a prolonged housing-market slump.
The number of loans approved has now fallen for 12 consecutive months. And the April figure was down 5,000 on March and almost half the level of the corresponding month last year. The overall value of mortgages approved was £23.8 billion, £2.3bn below the average lent in the previous six months. But re-mortgage approvals rose by 8,000 to 106,000.
The figures highlighted the difficulty faced by borrowers in obtaining mortgages, with banks and building societies increasingly tightening their loan criteria.
“This highlights very clearly the real problem facing not just the property market but also the wider economy,” said Simon Rubinson, chief economist for the Royal Institution of Chartered Surveyors. “A collapse in transactions of this magnitude has major implications both for consumer spending and a wide range of ancillary industries.
“Although a supportive response from the Bank of England is improbable in the near term, the persistence of such a trend could force the hand the authorities as autumn approaches.”
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