Mortgage lending slows, Bank says
The number of new mortgages being given to house buyers has fallen by 20% in September from a year earlier, according to Bank of England figures.

Last month, 102,000 new mortgages were approved for house buyers, 25,000 fewer than in September 2006, and 6,000 less than in August, the Bank said.

The figures add to the growing body of evidence that the property market is now cooling off rapidly.

Recent surveys have shown that price growth is slowing down in many areas.

Last week the Land Registry for England and Wales reported that annual property price inflation had dropped in September to 8.7% from 9.4% in August, describing this as a "noticeable dip".

Other recent surveys, from big mortgage lenders, surveyors and the Department of Communities and Local Government, have all been pointing in the same direction.

The number of new mortgages approved by UK lenders in September was the smallest monthly amount since July 2005.

The downturn has been going on since the summer of 2006 when the Bank of England imposed the first of five increases in interest rates.

But the squeeze on the market now seems to be gathering pace as higher borrowing costs and prices that have still risen briskly in the past year have finally taken their toll.

This slowdown will manifest itself most obviously in 2008, according to the Council of Mortgage Lenders (CML).

Publishing its annual housing market forecasts, the CML said that house price growth would slow down to just 1% from an eventual 7% this year.

And it predicted that there would be a 15% decline in property sales during 2008, down to 1.01 million from an expected 1.17 million this year.


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http://news.bbc.co.uk/go/pr/fr/-/1/h...ss/7067170.stm