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Home loans: Mortgage approvals debt consolidation loans plunge by 65%
· Experts see little prospect of early market chase loans recovery
· Buy-to-let sector also suffers from loan famine
Kathryn Hopkins
The Guardian,
Wednesday August 27 2008
The value of mortgage quickens loans arena approvals is at a 10-year low. Photo: Photodisc/Getty Images
The crisis facing Britain's housing market was highlighted goverment small business loans yesterday by figures showing that mortgage approvals have plummeted 65% in the past 12 months while buy-to-let lending has also declined sharply this year.
Only 22,448 mortgages were approved last month, compared with 64,184 in July last year, as lenders continued to restrict mortgage availability and the value of houses fell across the country. Although the monthly figure was slightly up on the 22,369 approved in mobile mortgage loans June, the figures from the British Bankers' Association showed that it was individuals who make private loans still 12,000 below the average of the previous six months.
The value of mortgages approved for house purchase hit a 10-year low during the month, the BBA said, at just £3.2bn, which was 69% lower than the July 2007 figure of £10.3bn. Remortgaging was down 21% in the year to July, but still accounted for 50% of all mortgage activity.
David Dooks, statistics director at the BBA, said: "The monthly numbers of approvals for house purchase, which have fallen by some two-thirds over the last year, levelled off in July. It would, however, be premature to think that the housing market will now start to recover, because overall approval activity home loans mortgage rates continues to be very low."
The difficulty in obtaining a mortgage also affected buy-to-let lending, which declined in the first half of 2008, the Council of Mortgage Lenders said yesterday.
There were 144,600 new buy-to-let loans in the first half of 2008, down from 176,500 in the second half of 2007 and 169,500 in the first half of last year.
The mortgage market is slowing as potential buyers put their purchases on hold in the hope that the market perks up. But the situation is unlikely to get better until the acs student loans availability of home loans improves and house prices stop falling.
Halifax said this month that the credit crunch had wiped £20,000 off the cost of an average British home in the year to July, the biggest annual fall in property prices on record.
Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, believes that house prices will not pick up texas veterans land loans soon. "Mortgage activity appears to be stabilising day tax loans although the paltry level of activity is not supportive of a near-term pick-up in house prices.
"Few crumbs of comfort can be taken from recent signs that mortgage va loans land activity may have finally found a floor amid a secondary market for rv loans backdrop of a stalling economy and expected rises in unemployment."
The Council of Mortgage Lenders said: "The shortage of mortgage funding has limited activity across the mortgage business loans brokerage deal market including the buy-to-let sector, which has a significant number of lenders that rely on wholesale funding."
Opposition parties used the BBA's figures to attack the government. Justine Greening, shadow Treasury minister, said: "These figures show the extent of uncertainty in the housing market, which Alistair Darling made worse by sending out confused signals over a stamp best fha loans duty holiday.
"... Many people are putting their lives on hold as a result of Labour's economic incompetence. The chancellor should adopt the Conservatives' plan to abolish stamp duty for nine out of 10 first-time buyers."
The BBA figures also showed that people were tightening their belts, poor credit hostory--mortgage loans because there was weaker deposit growth and lower credit card spending in July.
Personal deposits rose by a slim £0.8bn in July, compared with an average of £2.8bn over the last six months.
However, the figures revealed that people are not turning to credit cards to help them maintain spending habits. The amount of purchases by credit card dropped to £102.3m from fastforward loans a six month average of £104.2m. New credit card spending was £7.1bn, the lowest figure since June student loans fixed interest rates 2007. Repayments of £7.4bn were also the lowest in over a year. "The pressures on household budgets are reflected in the relatively weak rise in individuals' deposits and, with consumer borrowing growing only slowly it seems that consumers are acting prudently," Dooks said.
Meanwhile, a report from ratings agency Standard & Poor's showed sonoma small business loans the number of Britons failing to meet mortgage repayments rose significantly in the second quarter of the year.
Explainer: Home loan decline
The foreclosure bail-out commercial loans number of new mortgages issued has stabilised, while fixed-rate calpers home loans and tracker deals on offer from the lenders have begun falling. It is the first glimmer of good news for estate agents in months. Will we now see the first green shoots of capital one home loans bill pay recovery in house prices?
Don't bet on it. Yesterday's BBA figures show lending remains at near record lows. A floor in the market had to be reached, because people die, have sudent tution loans babies, change jobs and get divorced. These people often have no choice but to move.
First-timers are still shut out of the market by huge deposit requirements. Most lending activity is in the remortgage market, as borrowers with equity come forgivable student loans for maine residents to the single parent home loans end of deals and seek a new lender. Many others are trapped at lenders such as Northern Rock, unable to move because any equity they had has evaporated. Arrears and repossession figures add to the gloomy picture.
The key to a firmer recovery lies in the jobs market. Unemployment has risen for six months in a row. The British Chambers of Commerce predicts auto loans in tucson it could rise to almost 2m. That could be the trigger for far more home equity loans general information serious house price falls as "forced sellers" dominate the market. Cuts in interest rates could lift confidence - but most economists are not pencilling that in until next year.
Patrick Collinson and Rupert Jones
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Home loans: Mortgage approvals plunge by 65%
This article appeared in the Guardian on Wednesday August 27 2008 on p22 of the Financial section. It was last updated at 09:54 on August 27 2008.
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on Wednesday August 27 2008 on p22 of the Financial section. It was last updated at 09:54 on August 27 2008.
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