BBA: Mortgage lending weakening

Gross mortgage lending in September amounted to £18.5 billion, the British Bankers' Association (BBA) has said, a sign that the housing market is continuing to cool as the year progresses.

The figure is just three per cent higher than that reported in September 2006, with the number of mortgages approved over the month (160,879) down by 12.1 per cent year-on-year.

Underlying net mortgage lending rose by £5.8 billion last month, the study added, down from the £6.1 billion figure reported in August but slightly above the recent average of £5.6 billion.

“Lower amounts of new mortgage lending and fewer loans approved for house purchase signal a weaker outlook for the mortgage market, particularly if loan supply reduces in the aftermath of the recent financial markets difficulties and borrowing costs remain at current levels," said BBA director of statistics David Dooks.

Howard Archer of Global Insight noted that while the year-on-year decline in September was lower than the average fall seen in 2007 thus far, data on mortgage approvals (down 27 per cent year-on-year) provided a more accurate assessment of where the market is heading.

Finance your build or renovation with one of BuildStore's unique finance packages

© Adfero Ltd