Figures show that the number of new mortgages approved by British banks has fallen by a fifth last month, the lowest figure for ten years.

According to the British Bankers Association, mortgage approvals have dropped 56 per cent from May 2007, dropping 20 percent between April and May this year alone.  A Figure of 28,000 mortgages were approved, the lowest number of all time.

This is bad news for the Government, who has made it clear they want to boost the housing market as well as restoring the economy of the country after the effects of the credit crunch.

Chancellor Alistair Darling has criticised mortgage lenders who have been overcharging consumers, with mortgage arrangement fees rising by 66 per cent in the last 18 months.

He said: “I’m very concerned that people ought to be treated fairly, especially people coming off fixed rates and going onto different rates.

“We have met the Council of Mortgage Lenders to try and reach an agreement to ensure people are treated fairly, but if that isn’t happening, I will ask the FSA to pursue the matter.”