The British Bankers’ Association (BBA) have released their latest mortgage figures for September and it isn’t pretty; the numbers show that mortgage lending plummeted to its lowest level for a decade and mortgage approvals for house purchases sank to an 18-month low.
The results have led to one industry expert claiming ‘the housing market has very little going for it’.
Net lending, which does not include redemptions and repayments, was £1.6bn in September, down from £2.5bn in August and the lowest figure since October 2000, a result of banks encouraging customers to pay down their mortgages.
The BBA said the muted net lending figure reflected the fact that gross lending remained subdued, with only £8 billion advanced during the month, the lowest level since May 2009 and 11% down on September last year.
BBA statistics director, David Dooks, said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties. Demand for new mortgages remains low despite more properties on the market and falling house prices.”
Howard Archer, chief UK and European economist at IHS Global Insight, said: “The BBA data showing mortgage approvals sinking to an 18-month low in September puts further downward pressure on house prices. It reinforces our belief that house prices will trend down over the final months of 2010 and in 2011 to lose around 10% in value. In our view, the housing market has got very little going for it at the moment, apart from low mortgage rates – and that is if you can get a mortgage.”