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Mortgages slump by £30bn
Borrowing for home loans fell 12 per cent in September, with the Council of Mortgage Lenders making advances worth £30billion less than in August. CML said yesterday that while lending last month was up 2.5 per cent on September 2006, this was the lowest annual increase for two years.
The British Bankers' Association also showed a slowdown in mortgage lending. The BBA also said unsecured lending on credit cards and personal loans slowed during September.
The CML said while it was usual for mortgage lending to fall between August and September, the latest decline was more than double the typical reduction of 5 per cent. Mortgage lenders believe the figures represent further evidence of a marked slowdown in the housing market, particularly as they reflect the period just before the Northern Rock crisis.
Housing market analysts warn that even if the Bank of England cuts interest rates – as some economists now expect it to do before the end of the year – the property market slowdown is likely to continue.
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