Mortgage approval rates 'weakening'

Mortgage approval rates in June were significantly down on the previous year, despite the overall trend for lending staying fairly consistent, the British Bankers Association (BBA) has revealed.

A total of 193,850 mortgages were approved for all purposes in June, eight per cent fewer than the previous year, with an aggregate value of £23.1 billion.

The average loan amount approved for house purchase was £159,600, which was 16 per cent higher than June 2006.

Gross mortgage lending hit £21.5 billion in June this year, according to the BBA, which is a record figure. The association stressed, however, that this rate of lending is a reflection of strong remortgaging activity and only five per cent up on a year earlier.

Approvals for remortgaging purposes in June were down by one per cent in number on the previous year, but up by ten per cent in value.

David Dooks, BBA director of statistics, said: "Although the trend in net mortgage lending is being maintained, approval numbers for house purchase are well down on this time last year, suggesting that market demand may be reacting to higher mortgage costs."

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