Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

New lending plummets

The number of new mortgages approved by UK banks has slumped dramatically, a further sign of the impact of the credit crunch.

The British Bankers' Association (BBA) said just 35,417 new mortgages had been agreed for house purchases in March, down nearly a fifth on February. More starkly, the number of mortgages taken out was 46 per cent down on March 2007, representing the lowest monthly total since September 1997.

The BBA's spokes-man, David Dooks, laid the blame for the fall in approvals on the credit crunch, saying: "Reduced product ranges and tighter [lending] criteria resulted in significantly fewer loan approvals." But he added: "Pressures on personal finances are also con-straining demand, not only for mortgages but for personal loans and borrowing on cards."

Last week, the Bank of England announced plans to inject at least £50bn into the banking system to free up lending between banks. It is hoped this will then allow more customers to obtain mortgages.