Mortgage approval levels continue to slow

Mortgage lending levels weakened again in May, with an increase of £3.8bn recorded by the British Bankers' Association (BBA).

According to the BBA’s figures, the number of house purchase approvals hit a record low last month, with 21,118 loans approved for this reason – a drop of 66.9% from this time last year. However, the number of loans approved for remortgage have dropped by only 13.1% since last year, numbering 59,637 in June 2008.

David Dooks, statistics director at the BBA, said: “Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990’s. However, even in this rapidly slowing market, net lending has still grown by 12% over the past year and there continue to be significant numbers of people remortgaging with the banks.”