UK Mortgage Approvals By Banks Continue To Fall

The British Bankers Association (BBA) announced today that mortgage approvals for house purchases by banks in the United Kingdom continued to fall in May. At 4,289 million GBP (Great Britain Pounds) they are now 64% below the peak of 11,811 million GBP reached in November of 2006. Approvals for re-mortgaging, on the other hand, are rising. In May they were 9,165 million GBP, more than twice approvals for house purchases. In the past approvals for refinancing were generally lower than those for house purchases as can be seen in the first chart.

In addition to banks, building societies, non bank credit grantors and specialist mortgage lenders are in the business of providing loans for house purchase and re-mortgaging. The Bank of England publishes data on all the sources of mortgage finance, usually about three weeks after the BBA release. As banks are the major supplier of mortgage credit, there is a close correlation between the two series as can be seen in the second chart.