Monday 2nd June 2008
Fewer mortgages were approved in April than in any other month on record, figures from the Bank of England reveal.
The number of approvals granted over the course of the month stood at 58,000, compared with a final figure of 63,000 for March.
Mortgages for house purchases contribute towards the headline statistic, while lending for other purposes stood at 52,000 approvals - also down since the previous month.
But the Bank of England notes that greater remortgaging activity was seen, with 106,000 such loans arranged in April.
The total value of loans approved for house purchases, measured in billions of pounds, was in single figures for the second month at £8.3 billion.
In March the figure stood at a flat £9 billion, while data for January and February also showed lending below the six-month average of £10.7 billion for the second half of 2007.
Commenting on the figures, Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors, notes the sharp drop in approvals over the past year.
"The 58,000 mortgages approved in April is roughly half the total sanctioned in the same month a year ago," he points out.
"This highlights very clearly the real problem facing not just the property market but also the wider economy."
He explains that such a significant collapse is likely to have knock-on effects with implications not limited to consumer spending.
Industries relating to the housing market are also likely to feel the pinch, he suggests, which could "force the hand" of the Bank of England to take action towards the autumn.
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