March Sees Lending Slump

As the month’s roll by the credit crunch’s smothering impact on the property market is becoming increasingly evident with figures released today only confirming what many have already speculated, that UK housing sales have well and truly slumped.

The findings, released as part of the British Banking Association’s March survey, reveal that during the past month only 129,300 mortgages were approved in total, marking the lowest number granted since September 2000 and, with remortgages accounting for almost half of these, the outlook appears bleak.

Worse still, during the month, only 35,417 mortgages for the purchase of new homes were approved, representing a 46.2% fall on last year’s figures and a return to levels not reported since September 2000 when the BBA first began to collate these statistics.

The value of homeowner loans also saw a significant drop, with gross mortgage lending down 14.7% on the same period last year and home buyer loans down a massive 43.7% despite the average mortgaged property actually increasing in value during this time.

The BBA attribute this massive slowdown solely to the effects of the credit crunch with mortgage providers restricting both their lending and product affordability as a result of the difficult inter-bank lending conditions we're currently seeing.

Commenting, David Dooks, statistics director for the BBA, said:

"The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals."