Mortgage approvals plummet

The number of mortgages approved last month fell by more than a third, according to British Bankers' Association figures.

13:56 26 November 2004

The number of mortgages approved last month fell by more than a third, according to British Bankers' Association figures.

Just 59,011 mortgages were approved in October 2004, 35 per cent fewer than the same month last year.

A total of 15 billion was lent - down 1.2 billion on September and 32 per cent lower than October 2003, representing the third successive year-on-year fall.

BBA figures showed that equity withdrawal led the retreat, being far weaker in October, while remortgaging held strong.

David Dooks, BBA director of statistics, said: "The weakening demand for both mortgage lending and consumer credit seen over the last few months continued in October and weak approvals data suggest that this pattern will be maintained in the short-term.

"With mortgage lending volumes slowing it is not surprising that competition among lenders is intensifying and at the same time, borrowers are looking to reduce their borrowing costs. As a result, re-mortgaging is holding up and accounted for a high 39 per cent of all approvals in October."

The fall in mortgages coincides with a general cooling of the once-booming house market, with many analysts predicted a gradual fall in prices over the next few years.