The number of mortgages approved for people buying a house dived by nearly 70 per cent during the past year to hit a new record low, figures showed today.
Just 36,000 new loans were arranged for people moving house during June, 69 per cent fewer than in the same month of 2007 and 12 per cent less than in May, according to the Bank of England.
Mortgage lending also dropped steeply during the month, with net advances hitting a near eight-year low of £3.1 billion.
Meanwhile, figures today revealed that Spanish-owned high street bank Abbey has overtaken Halifax as the biggest lender of new mortgages in the UK.
Abbey said its share of the new home loan market soared to around 26 per cent in the first six months of the year, toppling Halifax from the pole position.
The firm, which is part of the Santander banking group, said it wrote one in three of every new mortgages in the second quarter as it picked up business while rivals cut back on lending amid the credit crunch.
Abbey's financial performance also bucked the wider gloom in the mortgage market, contributing £485 million in profits to its Spanish parent group, up 20 per cent on the first half of last year.
The lender's net mortgage lending soared to £8.3 billion in the six months to 30 June, after seeing market share rise to 16 per cent in the first quarter and then more than doubling to 35 per cent in the following three months.