Home loans hit four-year low

THE housing slowdown looks set to continue into the New Year following news today of a dramatic fall in mortgage demand to its lowest for almost four years.

The British Bankers' Association said mortgage approvals for house purchase - loans agreed but not yet made - were 20% lower in November than October and down 41% on a year ago. The number of approvals was the lowest since January 2001.

Remortgaging approvals and equity withdrawal loans were also weaker, indicating consumers' dwindling appetite for borrowing in the face of higher interest rates.

The BBA confirmed earlier numbers showing High Street banks gave out £4bn in home loans during the month - the smallest total since January 2002.

David Dooks, the BBA's director of statistics, said: 'Weaker mortgage lending in November continued the pattern of reduced demand that we have seen over the second half of this year, and there is little to suggest that mortgage appetites will change in the near term, given the noticeable slowdown in the housing market.'

The news is the latest evidence that the housing market has hit the buffers following boom conditions earlier this year. But the jury is still out on whether property prices will collapse or stagnate.

The BBA said hefty repayments meant net lending on credit cards totalled £219m in November, well down on the recent £413m average.