[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 27 October, 2004, 15:03 GMT 16:03 UK
Mortgage approvals drop sharply
A graph showing number of mortgages approved
The number of mortgages approved by banks fell for the fourth month in a row in September, figures have shown.

According to the British Bankers' Association (BBA), 59,905 property loans were granted last month.

This represented a 29% fall from the 81,635 new loans approved in September last year.

Meanwhile, figures from the UK government showed a rise in court actions to repossess homes, a further sign that rate rises were being felt.

This may be showing that some people have borrowed so much that they have become very sensitive to small changes in interest rates
John Butler, economist, HSBC

UK interest rates have risen five times since November and currently stand at 4.75%.

The Department for Constitutional Affairs said the number of court actions entered into in England and Wales to repossess homes rose to 18,513 between July and September, compared to 16,098 during the same period last year - a rise of 15%.

"I think this may be showing that some people have borrowed so much that they have become very sensitive to small changes in interest rates," said John Butler, UK economist at HSBC.

Lending dip

According to the BBA, gross mortgage lending fell to 16.3bn in September, the first year-on-year fall since 2000.

This was 0.3bn lower than the August figure and represented a 3.8% drop on September 2003.

David Dooks, BBA director of statistics, said the market would continue to wane.

"'Approvals for house purchase continued to slow, so consequently it would seem likely that underlying net mortgage lending will continue to be relatively weaker in the next few months," said Mr Dooks.


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific