Login to UKBP
Commercial Property News
UK mortgage approvals fall to new low as banks starve the market of cash
UK mortgage approvals fell 64% on the year to a record low in August, the British Bankers’ Association said today, suggesting no end was in sight for the country’s housing market woes.
The BBA blamed the drop on uncertainty regarding the government’s policy on stamp duty as well as continued affordability pressures and tight lending conditions.
It said just 21,086 mortgages were approved last month for house purchase, down from 22,239 in July and more than 12,000 below the average of the previous six months.
“This is a really dismal set of mortgage data,” said Howard Archer at Global Insight.
“Given these very poor fundamentals for the housing market, the recently announced government measures to support the housing market are very unlikely to have any significant impact in stabilising activity or prices.”
After several weeks of speculation, the government moved on Sept 2 to make all home transactions worth £175,000 or less exempt from stamp duty for one year.
Estate agents criticised the government for floating the idea of a stamp duty holiday without immediately acting on it, saying many potential home buyers had postponed their purchases as a result.
The report highlights downward pressure on British house prices which have already fallen more than 10% from their peak last year as the credit crunch made it harder and more expensive to get finance.
Total mortgage lending was just £2.1 billion in August, less than half the previous month’s total.
“Falling property prices, economic pressures on households, tighter lending criteria and anticipation of the government’s announcement on stamp duty all suppressed or delayed demand in August and will continue having an impact in the months ahead,” said BBA statistics director David Dooks.
The BBA blamed the drop on uncertainty regarding the government’s policy on stamp duty as well as continued affordability pressures and tight lending conditions.
It said just 21,086 mortgages were approved last month for house purchase, down from 22,239 in July and more than 12,000 below the average of the previous six months.
“This is a really dismal set of mortgage data,” said Howard Archer at Global Insight.
“Given these very poor fundamentals for the housing market, the recently announced government measures to support the housing market are very unlikely to have any significant impact in stabilising activity or prices.”
After several weeks of speculation, the government moved on Sept 2 to make all home transactions worth £175,000 or less exempt from stamp duty for one year.
Estate agents criticised the government for floating the idea of a stamp duty holiday without immediately acting on it, saying many potential home buyers had postponed their purchases as a result.
The report highlights downward pressure on British house prices which have already fallen more than 10% from their peak last year as the credit crunch made it harder and more expensive to get finance.
Total mortgage lending was just £2.1 billion in August, less than half the previous month’s total.
“Falling property prices, economic pressures on households, tighter lending criteria and anticipation of the government’s announcement on stamp duty all suppressed or delayed demand in August and will continue having an impact in the months ahead,” said BBA statistics director David Dooks.
Tue, 23rd Sep 2008