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Market for new mortgages slows

Date: 31 Jan 05

The latest figures from the British Bankers' Association point to a five-year low in mortgage lending.

In December £14.2 billion was lent in mortgages, three per cent less than in November and ten per cent lower year on year.

The number of mortgage approvals was 29 per cent down on the same month the year before, additionally the average loan approved for a house purchase fell to £118,100.

The number of mortgage approvals for house purchases, as opposed to remortgages, fell 38 per cent in number and 31 per cent in value - despite house prices climbing more than ten per cent over the year.

David Dooks, British Bankers' Association director of statistics, noted: "Despite an upturn in net mortgage lending in December, in part reflecting a processing catch-up, the general slowdown in demand over the last six months saw lending in 2004 matching 2003's increase of £62.3 billion.

"This time of year sees a seasonal weakness in loan demand, but with approval volumes running well below those in the same month a year earlier, mortgage lending is expected to remain relatively subdued in the near-term."

The Building Societies' Association also recorded a drop in mortgage lending in December.

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