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26 November 2008 Mortgage lending down by 52% in October

Mortgage lending more than halved in October when compared with the same period last year, new figures reveal.

According to the British Bankers’ Association (BBA) the number of new mortgage approvals fell to 21,584 last month – 52% lower than in October 2007.

BBA statistics director, David Dooks, said: ‘Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing.

‘Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October.’

The findings come in the wake of Sir James Crosby’s report into the state of the mortgage market, which was published alongside the Pre-Budget Report on Monday.

The former banker warned that without Government intervention, net new mortgage lending could decrease in 2009.

Chancellor Alistair Darling said he ‘shared the concerns’ expressed in the report and would draft a plan based on its recommendation in time for the Budget next Spring.

However, some experts are calling on the Chancellor to take more immediate action to address the problem.