LONDON: Mortgage approvals in Britain fell in September to a seven-year low, giving fresh evidence that the housing market is on a downturn, impacted as it is by the high interest rates and the crisis in the financial markets.
The British Bankers' Association said in a report Friday 52,685 mortgages received approval in September, which is down 27 per cent compared with September 2006 figures and the lowest figure for the month in seven years. The association said underlying net mortgage lending too came down to 5.8 billion pounds in September from 6.1 billion pounds in August. The value of mortgage approved fell to 8.02 billion during September from 9.39 billion in August.
The association's director of statistics David Dooks said lower amounts of new mortgage lending and fewer loan approvals indicate a weaker outlook for the mortgage market, especially when loan supply reduces in the aftermath of the recent difficulties in the financial markets.
Many analysts feel the slowdown in the housing market is continuing to worsen as a result of the higher interest rates. They say the market will weaken through 2008 but they do not see any imminent crash of the market.
The number of approved mortgages, including remortgaging and equity withdrawal, was 12.1 per cent below September 2006 figures and the average loan approved for house purchase was 8 per cent up at 152,300 pounds.
The association's members account for around two-thirds of the total mortgage lending in the country. Usually, the monthly figures do not tally with the figures from the Bank of England, which cover the entire property market of the country. The central bank is expected to release its figures Monday next.
