BBA figures suggest fall in UK investment property loans

November 27, 2008 by OPPE News

photo credit: king_david_uk
British banks have underlined the need for a swift solution to the UK’s mortgage problems by reporting a low rate of home loan approvals.

The British Bankers’ Association released statistics showing October’s mortgage rates were lower than the average for the last six months.

The availability of investment property loans has suffered as a lack of liquidity prevents the UK’s main lenders from approving new deals.

However, officials pointed out that ‘high street’ banks were still providing two-thirds of all mortgages and said new measures could help availability.

BBA statistics director David Dooks said banks had increased lending to non financial firms and had bolstered financial intermediaries.

Mr Dooks said:

“That support, together with lower interest rates, will feed through to lending and the pre-budget report measures will help consumer demand.

“Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now.”

He said there was currently a “reduced appetite” for borrowing and consumer credit was still “subdued”.

In October only 21,584 mortgages were approved for house purchases, down from 23,383 the previous month.

The BBA represents the UK’s largest banks and other lenders, with its members accounting for 150 million personal accounts and some £50 billion in contributions to the economy.