The total value of mortgages for October compared to the same month last year was 25 per cent lower, and the value of house purchases is down by 34 per cent, according to figures from the British Bankers' Association.
At £15.1 billion, the total value of mortgage approvals was far below the six month average of £19.5 billion, and purchase approvals were also below their six month average of £9.3 billion at £6.8 billion. While gross mortgage lending for October was up by 2.5 per cent compared to October 2006, at £18.8 billion it was below the six month average of £19.1 billion.
Approvals for house purchase were 37 per cent lower in October than at the same time last year, hitting a record low of 44,105, and remortgaging was also affected, falling 17 per cent to 54,881.
The BBA also found that unsecured lending has continued to be restrained and personal deposits showed no signs of strengthening. Credit card borrowing rose 4.6 per cent, but October saw below average numbers of transactions. Repayments continue to surpass new spending as consumers tighten their belts in light of the credit crisis.
BBA statistics director, David Dooks, commented on he latest figures: "October's data provides evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing.
"Pressure on household finances, the cumulative impact of interest rate rises over the last year, the expanded application of home information packs and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply. Personal deposits also remain below trend, as people continue to consider where they should hold their money in the light of the recent difficulties in the financial markets."
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