November 23, 2007 / 9:59 AM / 12 years ago

Mortgage approvals dive to record low

Mortgage approvals fell to a record low in October and mortgage lending also softened, the British Bankers' Association says, in a further sign that the housing market is cooling. REUTERS

LONDON (Reuters) - Mortgage approvals fell to a record low in October and mortgage lending also softened, the British Bankers’ Association says, in a further sign that the housing market is cooling.

The BBA said mortgage approvals for house purchase fell to 44,105 in October from 53,997 in September. The October outcome also represented a 37.4 percent fall on the year.

Seasonally adjusted net mortgage lending rose by 5.0 billion pounds last month, down from a 5.9 billion rise in September and below the previous six month average of 5.6 billion.

“October’s data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing,” said David Dooks, head of statistics at the BBA.

“Pressure on household finances, the cumulative impact of interest rate rises over the last year, the expanded application of home information packs and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply.”

Most housing market surveys are starting to show a cooling in house price inflation as five interest rates hikes to 5.75 percent since last August and the credit crunch dampen buyer sentiment.

The BBA has changed the way it reports its lending and mortgage approvals data this month, adjusting the approvals figures to take seasonal factors into account.

The Bank of England publishes lending and mortgage approvals figures for October on November 29.

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