Mortgage approvals fall 40 per cent, says BoE

Mortgage approvals
have dropped 40 per cent from a year ago, with lending now at its lowest level
for 13 years, according to stats from the Bank of England.

The number of loans
approved for house purchases fell to 73,000 in February, with remortgaging
falling to 111,000. Figures released by the BoE also show that equity withdrawal
is now at its lowest level for three years.

It says that equity
withdrawal in the last quarter of 2007 fell by 33 per cent compared to the
previous three months. It was down by nearly half on the same time the previous
year. Figures also show an increaser in total net lending to individuals in
February to £9.8bn, which was above the increase in January and the previous six
month average.

Liberal Democrat
Shadow Chancellor Vince Cable says: “It is becoming increasingly clear that the
downturn in the housing market is much more than just a blip. As the credit
crunch continues to restrict lending and with many people saddled with masses of
personal debt, a dramatic fall in mortgage approvals was
inevitable.”

He adds: “As house
prices continue to fall and mortgage costs rise, we are in real danger of
returning to the woes of the Tory recession with large numbers of families
suffering negative equity and repossession. The Government must act now to
prevent mass repossessions which will only worsen this housing
crash.”