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| Mortgage loans reach 'record low' | Mortgage loans reach 'record low' |
| (about 1 hour later) | |
| The number of new mortgages approved for house purchases has fallen to its lowest level since records began in 1993, Bank of England figures show. | The number of new mortgages approved for house purchases has fallen to its lowest level since records began in 1993, Bank of England figures show. |
| The number of home loans approved in June fell to 36,000, down from 41,000 in May, as the slowdown continued. | The number of home loans approved in June fell to 36,000, down from 41,000 in May, as the slowdown continued. |
| The increase in total mortgage lending was also lower than many analysts had predicted, rising by £3.1bn in June. | The increase in total mortgage lending was also lower than many analysts had predicted, rising by £3.1bn in June. |
| The figures were released as a report for the Treasury outlined various options to revive the mortgage market. | The figures were released as a report for the Treasury outlined various options to revive the mortgage market. |
| Lack of supply | Lack of supply |
| The number of home loans approved has now fallen for 14 consecutive months, the Bank's figures show, and the figure is at its lowest since the Bank began reporting the data in 1993. | The number of home loans approved has now fallen for 14 consecutive months, the Bank's figures show, and the figure is at its lowest since the Bank began reporting the data in 1993. |
| The credit crunch has reduced the availability of mortgages, especially to those house hunters who are unable to offer a large deposit. | The credit crunch has reduced the availability of mortgages, especially to those house hunters who are unable to offer a large deposit. |
| But in recent weeks the cost of deals to new borrowers has been cut by a number of lenders, reversing the previous trend of rising interest rates on new fixed-rate home loans. | But in recent weeks the cost of deals to new borrowers has been cut by a number of lenders, reversing the previous trend of rising interest rates on new fixed-rate home loans. |
| Unless the authorities take steps to restart the mortgage market... there will be more bad news in store for the both the housing market and the retail sector Simon RubinsohnRoyal Institution of Chartered Surveyors UK mulls mortgage market options | Unless the authorities take steps to restart the mortgage market... there will be more bad news in store for the both the housing market and the retail sector Simon RubinsohnRoyal Institution of Chartered Surveyors UK mulls mortgage market options |
| House prices, however, have continued to drop, according to most surveys, with the Land Registry the latest to register a fall in property prices in England and Wales. | House prices, however, have continued to drop, according to most surveys, with the Land Registry the latest to register a fall in property prices in England and Wales. |
| An assessment of the outlook for mortgage finance was published on Tuesday by Sir James Crosby, the deputy chairman of the City watchdog, the Financial Services Authority. | An assessment of the outlook for mortgage finance was published on Tuesday by Sir James Crosby, the deputy chairman of the City watchdog, the Financial Services Authority. |
| One of the options outlined is for the taxpayer to guarantee to billions of pounds of mortgage market bonds to kick-start lending again. | One of the options outlined is for the taxpayer to guarantee to billions of pounds of mortgage market bonds to kick-start lending again. |
| Remortgaging | Remortgaging |
| The Bank said that the number of loans approved for house purchases in June was 69% down on the same month in 2007 and 12% down compared with May. | The Bank said that the number of loans approved for house purchases in June was 69% down on the same month in 2007 and 12% down compared with May. |
| In terms of the housing market, things could get worse before the Bank of England cut [interest] rates, given its focus on inflation Vicky RedwoodCapital Economics | In terms of the housing market, things could get worse before the Bank of England cut [interest] rates, given its focus on inflation Vicky RedwoodCapital Economics |
| The number of homeowners remortgaging had also fallen, down to 84,000 in June compared with 90,000 the previous month. | The number of homeowners remortgaging had also fallen, down to 84,000 in June compared with 90,000 the previous month. |
| Total mortgage lending showed its weakest rise for eight years, the Bank said. | Total mortgage lending showed its weakest rise for eight years, the Bank said. |
| The figures also revealed how much consumers were borrowing on credit cards and other loans and advances. | The figures also revealed how much consumers were borrowing on credit cards and other loans and advances. |
| The amount of lending by financial groups on credit cards grew by £0.4bn in June, a smaller rise than in May. Lending on other loans also rose by £0.4bn, which was also a smaller rise than in June. | The amount of lending by financial groups on credit cards grew by £0.4bn in June, a smaller rise than in May. Lending on other loans also rose by £0.4bn, which was also a smaller rise than in June. |
| The mortgage market figures could have a knock-on effect on the High Street, according to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors. | The mortgage market figures could have a knock-on effect on the High Street, according to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors. |
| "Against this backdrop, it is not surprising that the High Street appears under increasing pressure with consumers scaling back purchases of a range of household goods," he said. | "Against this backdrop, it is not surprising that the High Street appears under increasing pressure with consumers scaling back purchases of a range of household goods," he said. |
| "Unless the authorities take steps to restart the mortgage market, the likelihood is that there will be more bad news in store for the both the housing market and the retail sector during the latter part of the year." | "Unless the authorities take steps to restart the mortgage market, the likelihood is that there will be more bad news in store for the both the housing market and the retail sector during the latter part of the year." |
| Interest rates | Interest rates |
| The depressed state of the housing market was also shown by figures released by the Building Societies Association. | The depressed state of the housing market was also shown by figures released by the Building Societies Association. |
| The tenor of Sir James Crosby's report suggests that there would be significant risks to the health of the economy from doing nothing Robert PestonBBC business editor Read Robert's blog in full class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5168&edition=1">Send us your comments | |
| It said net mortgage lending by societies was down from £8.4bn in the first six months of 2007 to £3.4bn in the same period in 2008. | It said net mortgage lending by societies was down from £8.4bn in the first six months of 2007 to £3.4bn in the same period in 2008. |
| Analysts said the latest mortgage figures signalled further falls in house prices in the coming months. | Analysts said the latest mortgage figures signalled further falls in house prices in the coming months. |
| Vicky Redwood, of Capital Economics, said property prices could fall by 20% in 2008, but she added that no change was expected in interest rates. | Vicky Redwood, of Capital Economics, said property prices could fall by 20% in 2008, but she added that no change was expected in interest rates. |
| "In terms of the housing market, things could get worse before the Bank of England cut rates, given its focus on inflation," she said. | "In terms of the housing market, things could get worse before the Bank of England cut rates, given its focus on inflation," she said. |
| And George Buckley, chief UK economist at Deutsche Bank, said: "Even if they [mortgage approval figures] don't fall any further, these numbers are consistent with house prices continuing to fall quite rapidly." | And George Buckley, chief UK economist at Deutsche Bank, said: "Even if they [mortgage approval figures] don't fall any further, these numbers are consistent with house prices continuing to fall quite rapidly." |