Britain's housing market crisis: Mortgage approvals slump 20%

It seems that there are no signs of a reprieve in the current housing slump; Britain’s housing market crisis has now taken a turn for the worse as mortgage approvals are now down 20%, hitting an all time low. The British Bankers’ Association has said that just under 28,000 mortgages for homebuyers were approved last month, that is 57 per cent fewer than in May 2007; this is the lowest number it has recorded since the survey was launched to the market since 1997.

Mortgage approvals were 20 percent down on April; this is a knock on affect as mortgage lenders continue to increase their interest rates, as well as withdrawing a number of their products from the market. David Dooks, the BBA’s director of statistics, said: “Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households.”

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, has been talking about how housing market analysts were warning that the figures suggest that the housing market is still continuing to decline rather than stabilise. He said “They suggest the actual level of transactions have further to decline over the coming months.” He also added “The sheer scale of the collapse in turnover will inevitably have real implications for the economy and make it hard for the Bank of England to accede to the wishes of the money markets and raise the base rate to combat inflation fears.”

For a full report on this visit: The Independent