The number of new mortgages being approved for house purchase in Britain has dropped heavily for another month.
The number of new mortgages being approved for house purchase in Britain has dropped heavily for another month.
The Bank of England said 42,000 homes were approved in May, a 28% fall compared with the previous month and 64% down on a year ago.
The Bank of England said 42,000 homes were approved in May, a 28% fall compared with the previous month and 64% down on a year ago.
This is the lowest since the Bank began reporting the figures in 1993 and lower than many analysts' predictions.
This is the lowest since the Bank began reporting the figures in 1993 and lower than many analysts' predictions.
Mortgage lending has slumped owing to the credit crunch with institutions reducing their willingness to lend.
Mortgage lending has slumped owing to the credit crunch with institutions reducing their willingness to lend.
The number of home loans approved have now fallen for 13 consecutive months, the Bank's figures show.
The number of home loans approved have now fallen for 13 consecutive months, the Bank's figures show.
Housing market
Housing market
Philip Shaw, chief economist at analysts Investec, described the figures as "terrible".
Philip Shaw, chief economist at analysts Investec, described the figures as "terrible".
"It is really symptomatic of what is going on the housing market. The real danger is there is a knock-on effect to consumer activity," he said.
"It is really symptomatic of what is going on the housing market. The real danger is there is a knock-on effect to consumer activity," he said.
Recent figures from the British Bankers' Association on the number of new mortgage approvals to home buyers also showed a big drop, by 20% in May compared with April.
Recent figures from the British Bankers' Association on the number of new mortgage approvals to home buyers also showed a big drop, by 20% in May compared with April.
It blamed tighter lending criteria and a squeeze on household finances for the drop.
It blamed tighter lending criteria and a squeeze on household finances for the drop.
The Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors have warned that property sales this year would fall by between 35% and 40%.
The Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors have warned that property sales this year would fall by between 35% and 40%.
The Land Registry revealed last week that the number of house sales slumped by 50% in March compared with the same month in 2007.
The Land Registry revealed last week that the number of house sales slumped by 50% in March compared with the same month in 2007.
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