Mortgage lending by the UK's biggest banks has fallen sharply compared with a year ago, a banking body says.
Mortgage lending by the UK's biggest banks has fallen sharply compared with a year ago, a banking body says.
The number of mortgages approved for house purchases was down to 21,584 in October, 52% lower than a year earlier.
The number of mortgages approved for house purchases was down to 21,584 in October, 52% lower than a year earlier.
The figures come the day after a stark warning about the state of the mortgage market in a report by former banker Sir James Crosby.
The figures come the day after a stark warning about the state of the mortgage market in a report by former banker Sir James Crosby.
He warned that without government intervention, net new mortgage lending might shrink in 2009.
He warned that without government intervention, net new mortgage lending might shrink in 2009.
Lending statistics
Lending statistics
Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October David Dooks, British Bankers' Association
Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October David Dooks, British Bankers' Association
The figures from the British Bankers' Association (BBA) show that in October, net mortgage lending by the UK's biggest banks rose by £2.9bn.
The figures from the British Bankers' Association (BBA) show that in October, net mortgage lending by the UK's biggest banks rose by £2.9bn.
This was less than in September and below the average for the previous six months of £3.9bn.
This was less than in September and below the average for the previous six months of £3.9bn.
"Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing," said David Dooks, BBA statistics director.
"Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing," said David Dooks, BBA statistics director.
"Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October."
"Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October."
Crosby review
Crosby review
The Crosby report was one of the most striking entries in yesterday's pre-Budget report in warning about the state of the economy.
The Crosby report was one of the most striking entries in yesterday's pre-Budget report in warning about the state of the economy.
It said that banks could be drawing in more in repayments than giving out in new mortgages.
It said that banks could be drawing in more in repayments than giving out in new mortgages.
Sir James was commissioned by the Treasury to look at ways of reviving the mortgage market.
Sir James was commissioned by the Treasury to look at ways of reviving the mortgage market.
He is calling for a temporary guarantee with taxpayers' money of new mortgage-backed securities - the bundles of home loans sold on by banks to investors to fund fresh lending.
He is calling for a temporary guarantee with taxpayers' money of new mortgage-backed securities - the bundles of home loans sold on by banks to investors to fund fresh lending.
Without such intervention net new mortgage lending - gross new home loans minus repayments and redemptions - would fall below zero in 2009 and see only a modest recovery in 2010, he said.
Without such intervention net new mortgage lending - gross new home loans minus repayments and redemptions - would fall below zero in 2009 and see only a modest recovery in 2010, he said.
In 2007, net new mortgage lending stood at £108bn. This year it is forecast to be £40bn.
In 2007, net new mortgage lending stood at £108bn. This year it is forecast to be £40bn.
Chancellor Alistair Darling said he would draw up a plan based on the proposals in time for the main Budget, but he would require European permission to implement it.
Chancellor Alistair Darling said he would draw up a plan based on the proposals in time for the main Budget, but he would require European permission to implement it.
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