Concern Over Drop in Mortgage Approvals

The housing market continues to worry home owners and economists after official figures from the Bank of England revealed a massive decline in mortgage approvals. The hard fact is that n
et lending, which strips out redemptions and repayments, totaled just £86m during the month - a steep fall from June's £518m.

The Royal Institute of Chartered Surveyors commenting on the Bank of England mortgage approvals data:
"The data released this morning continues to highlight the subdued level of activity in the residential property market, despite the stamp duty holiday for first-time buyers of homes worth up to £250,000. The total number of mortgages approved per month has been fairly stable since the beginning of the year, fluctuating within a narrow band of just 2,000. In the first seven months of 2010, almost 340,000 mortgages were approved. This is higher than in the comparable period of 2009 when just over 310,000 mortgages were approved, but is well down on historic norms.

Simon Rubinsohn, RICS chief economist said:

"A lack of mortgage finance remains a key problem for many borrowers looking to take their first step on the property ladder, with the high deposits required still proving to be an obstacle for many. Uncertainty over the outlook for the market may also be discouraging would be buyers. This is reflected in developments in the rental market; the latest RICS Residential Lettings Survey released last week showed tenant demand continuing to grow strongly and rents rising due to a lack of supply."

The mortgage lending figures are the fourth lowest since the Bank's records began in 1993. 
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