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".
The implications of this is that the market is going to remain pretty weak for some time with a significant downward movement in house prices Ed StansfieldCapital Economics
The implications of this is that the market is going to remain pretty weak for some time with a significant downward movement in house prices Ed StansfieldCapital Economics
"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 (BBA) 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 (BBA) 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. BBA members account for about two-thirds of total UK mortgage lending.
It blamed tighter lending criteria and a squeeze on household finances for the drop. BBA members account for about two-thirds of total UK mortgage lending.
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.
'Change in attitude'
'Change in attitude'
The Bank of England figures also showed a drop in the number of mortgage approvals for homeowners who were remortgaging.
The Bank of England figures also showed a drop in the number of mortgage approvals for homeowners who were remortgaging.
House price figures for June will be revealed in the next few days
House price figures for June will be revealed in the next few days
That figure fell to 90,000 in May, down from 100,000 the previous month and below the monthly average over the previous six months of 104,000.
That figure fell to 90,000 in May, down from 100,000 the previous month and below the monthly average over the previous six months of 104,000.
Mortgage lending as a whole showed its weakest rise for seven years at £4.1bn - some £3bn down on the average for the previous six months.
Mortgage lending as a whole showed its weakest rise for seven years at £4.1bn - some £3bn down on the average for the previous six months.
The general figures were weaker than many economists had predicted.
The general figures were weaker than many economists had predicted.
"They are clear evidence in the change in attitude among mortgage lenders and home buyers," said Ed Stansfield, of Capital Economics.
"They are clear evidence in the change in attitude among mortgage lenders and home buyers," said Ed Stansfield, of Capital Economics.
"People no longer want to borrow and those that do want to borrow are not being allowed to by the lenders.
"People no longer want to borrow and those that do want to borrow are not being allowed to by the lenders.
"The implications of this is that the market is going to remain pretty weak for some time with a significant downward movement in house prices. We are off the scale. We have never been anywhere near as low as this in activity levels and mortgage approvals."
"The implications of this is that the market is going to remain pretty weak for some time with a significant downward movement in house prices. We are off the scale. We have never been anywhere near as low as this in activity levels and mortgage approvals."
Major lenders will reveal their house price figures for June in the next few days.
Major lenders will reveal their house price figures for June in the next few days.
The UK's biggest mortgage lender, the Halifax, recently suggested that UK house prices would drop by 9% this year, a more severe fall than its previous forecast.
The UK's biggest mortgage lender, the Halifax, recently suggested that UK house prices would drop by 9% this year, a more severe fall than its previous forecast.
'Looking to save'
'Looking to save'
New figures released by the Building Societies Association (BSA) show that lending in that sector also fell sharply in May.
New figures released by the Building Societies Association (BSA) show that lending in that sector also fell sharply in May.
Net lending by building societies in May was £125m compared with £1.2bn in May 2007.
Net lending by building societies in May was £125m compared with £1.2bn in May 2007.
Adrian Coles, director general of the BSA, said the lending figures reflected the "depressed state of the housing market".
Adrian Coles, director general of the BSA, said the lending figures reflected the "depressed state of the housing market".
But he added that people are looking to save with building societies, with saving at £853m in May, up from £608m during the same month a year ago and the highest figure for May since 2002.
But he added that people are looking to save with building societies, with saving at £853m in May, up from £608m during the same month a year ago and the highest figure for May since 2002.
Have you had difficulty getting a mortgage? You can send us your experiences using the form below:
Have you had difficulty getting a mortgage? You can send us your experiences using the form below. You can also send us your questions. Melanie Bien, mortgage expert from Savills Private Finance, will be answering them on the BBC News channel.
