The British Bankers Association monthly statistics for November revealed a 60% drop in the number of mortgages approved for house purchases. There was also a sharp monthly drop in remortgage approvals.
The figures confirm that the property market is extremely slow and looks set to remain so, with the Royal Institute of Chartered Surveyors stating their expectation of further house price falls in 2009. They voiced concern over the continued lack of mortgage finance but on a more positive note were hopeful that transaction numbers could be close to bottoming out.
Vince Cable, Liberal Democrat Shadow Chancellor commented, “There is a very serious problem of mortgage supply. It's understandable that people aren't willing to buy in a falling market but figures suggest that there are people who would buy if mortgages were available on reasonable terms. The Government and the mortgage industry will have to come up with ideas on how to restore responsible lending.”
Pointing at the role of Northern Rock he went on, “Meanwhile, there is a nationalised mortgage bank which is giving priority to contracting its loan book as soon as possible when it should be playing an active role in the economy.”