Mortgage lending lowest for ten years
Mortgage lending dived to its lowest level for a decade during September as activity in the housing market remained subdued, figures showed today.
Net lending, which strips out redemptions and repayments, was just £1.6 billion during the month, well down on the previous month's total of £2.5 billion and the lowest figure since October 2000.
Lending showed little sign of picking up in the near future, with the number of mortgages approved for house purchase dropping for the fourth consecutive month to hit an 18-month low, the British Bankers' Association said.
The BBA figures come a week after the Council of Mortgage Lenders said total advances during September had fallen to their lowest level for the month for a decade.
The BBA said the muted net lending figure reflected the fact that gross lending remained subdued, with only £8 billion advanced during the month, the lowest level since May 2009 and 11% down on September last year.
At the same time, it said banks were encouraging customers to pay down their mortgages, contributing to the ten-year low for net lending.
Demand for mortgages remains muted as low interest rates put people off remortgaging, while potential buyers sit on their hands until the outlook for both the property market and the wider economy becomes clearer.
But the number of properties being put up for sale has increased in recent months, putting downward pressure on house prices.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The BBA data showing mortgage approvals sinking to an 18-month low in September puts further downward pressure on house prices.
"It reinforces our belief that house prices will trend down over the final months of 2010 and in 2011 to lose around 10% in value.
"In our view, the housing market has got very little going for it at the moment, apart from low mortgage rates - and that is if you can get a mortgage."
Demand for unsecured borrowing also remained muted during September.
Credit card borrowing increased by £200 million during the month, but this was offset by a £200 million contraction in the amount owed through loans and overdrafts.
As a result, the amount of money owed through consumer credit was unchanged, in line with August.
Consumers' cautious approach was reflected in a further rise in savings levels, with people increasing the amount they had deposited by £2.7 billion, well up on the recent six-month average of £1.7 billion.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Actress sees off speculation about her face in an amazing way
Florida mother launched a petition to ban the sale of the dolls
Marvel has released first teaser trailer week early after it leaked online
- 1 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 2 Renee Zellweger on plastic surgery: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 3 Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Paralysed man Darek Fidyka walks again after treatment by British doctors on brink of 'cure' for paralysis
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village