British mortgage approvals fell to their lowest level since at least 1997 in November as buyers were deterred by falling house prices and fears that the economic slowdown will hit their budgets, the British Bankers' Association (BBA) said today.
The association, which represents Britain's largest lenders, said banks approved just 17,773 loans for new home purchases in November — 61 per cent fewer than the same month last year, and the lowest number the association has ever recorded since it began keeping monthly records in 1997.
It is also 14 percent lower than in October, when 20,767 approvals were booked, the BBA said.
The fall is the result of the simultaneous reduction in banks' capacity to lend — because of the credit crunch — and the fact that would-be buyers have been deterred from purchasing homes by fears of unemployment and expectations homes will be cheaper next year.
Property researcher Hometrack yesterday predicted that house prices will decline by 10 percent during 2009, on top of falls of 9 per cent in 2008.
The BBA's statistics director, David Dooks, said people were worried about how Britain's economic slowdown would effect their ability to keep up with mortgage repayments, discouraging buyers.
"People remain concerned about the impacts of the rapidly slowing economy on their personal finances," said Dooks.