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Mortgage approvals drop with no pick-up in sight

24 September 2010
Written by rosalind renshaw

Approval for house purchase mortgages dropped to £4.7bn in August, down from £5bn in July, the British Bankers Association has reported.

The average value of mortgages agreed also fell, to £143,500.

Altogether, there were 31,767 mortgage approvals in August, down from 34,219 in July, and a worrying 22.3% fewer than in August 2009.

David Dooks, statistics director at the BBA, said: “Demand for mortgages continues to be weak despite more properties reportedly coming on to the market. Even with stable or falling house prices, the current economic climate makes it unlikely that demand will pick up in the near future.”

James Moss, director at Curzon Investment Property, a London-based property specialist, said: “It’s clear that political commitments to revive the housing market are failing. Banks continue to pay record bonuses with money that should be used to rebuild the economy and support the housing revival. Yet the Government is doing nothing about it.

“Without firm commitment from the banks to lend and support new transactions, we risk seeing a double dip in the housing market.”

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