Mortgage approvals in October dropped by more than a half compared with the previous year, according to the British Bankers' Association.
The amount of mortgages approved in October was less than half the figure for the same month last year, the British Bankers' Association (BBA) has revealed.
There were 21,584 approvals last month, 53 percent down from October 2007 and 1,799 less than in September. Net mortgage lending by the country's biggest banks rose by £2.9 billion, less than the previous month's figure of £3.5 billion and also short of the previous six month average of £3.9 billion.
However, despite the gloom, the BBA's statistics director David Dooks said the banks had been making efforts to remedy the situation. He revealed that they provided two thirds of all new mortgages, amounting to almost £12 billion, and had helped non-financial companies and financial intermediaries.
"That support, together with lower interest rates, will feed through to lending and yesterday's Pre-Budget Report measures will help consumer demand," he said. "Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing."
The fact that approval levels were down came as little surprise to Oliver Gilmartin, a senior economist at the Royal Institution of Chartered Surveyors. He said that for the market to recover, his organisation's proposed tax-free saving scheme for first-time buyer deposits should be considered as "one of several steps".
