Mortgages drop by 14 per cent

25/10/2007

Last months figures indicate that the number of mortgage approvals has decreased by 14 per cent.

BBA witnessed 52,685 approvals for house purchases during September period, this a drop from 61,051 the previous month and 27 per cent lower than 2006.

Approvals are the main measure of progress, especially in the property sector, and this decline is seen as an early indicator of a slowdown in property value.

Mr Newland commented: "We expect mortgage demand, and other indicators of housing activity, to slow further in the coming months, consistent with quite a sharp slowdown in house price inflation in 2008."

BBA's director of statistics, David Dooks added, “Lower amounts of new mortgage lending and fewer loans approved for house purchase signal a weaker outlook for the mortgage market, particularly if loan supply reduces in the aftermath of the recent financial markets difficulties and borrowing costs remain at current levels.

Research by the Royal Institution of Chartered Surveyors have stated that house prices have started to decrease at a steady pace first time in two years.

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