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The number of mortgages approved for house purchases fell back to a record low in October, despite a fall in interest rates at the start of the month, figures showed today.
Lenders approved 32,000 home loans for buyers during the month, the same record low as in August, according to the Bank of England. This reverses a slight uplift in September when 33,000 mortgages were approved.
The value of the loans fell below August's level, however, to £3.9bn, as falling house prices and lending restrictions pushed down the value of each loan.
Mortgage lending for new purchases is running at more than 60% below the level of last October, when 88,000 loans worth a total of £12.2bn were granted to buyers.
The drop follows a year of falls in the housing market, which have shaken the confidence of buyers, and a period in which lenders have clamped down on high loan-to-value deals, with many now insisting on deposits of at least 25%.
The value of net mortgage lending, which takes into account repayments and redemptions, dived by 70% from £1.5bn in September to just £459m during October.
This is double August's figure, but well below the six-month average of £2.7bn.
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