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Mortgage lending falls dramatically

Wed, 01 Oct 2008

Mortgage lending all but ground to a halt in August, new figures show.

Data released by the Bank of England reveals banks gave out £143 million worth of mortgage lending last month, compared with £3 billion in July and 9.1 billion in August 2007.

The Bank also found the number of mortgages for new house purchases fell to 32,000, 70 per cent fewer than 12 months ago.

Commenting on the figures, Howard Archer, chief UK and European economist at Global Insight, said: "The dire Bank of England mortgage data shows that housing market activity is being decimated by the highly damaging combination of stretched buyer affordability and tight lending practices."

The total amount of outstanding mortgage debt fell for the first time ever, down to £1.216 trillion from around £1.217 trillion.

Meanwhile, research by Moneyfacts.co.uk reveals the number of mortgage products on offer fell by a tenth on Monday from 3,914 to 3,469.
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