Dive in mortgage approvals points to lower house prices

MORTGAGE approvals fell by 60% in May compared with a year ago and will reduce further over the next three months, according to figures from the Bank of England, leading to fears that we are now heading for a 1990s-style property slump, writes Teresa Hunter. Lenders granted 42,000 applications for mortgages in May, well down on the typical 119,000 monthly property purchases seen in recent years. However, banks have told Governor Mervyn King that they intend to reduce the number of loans available again o ver the summer. The squeeze is already hitting the pockets of many in the Scottish market. Willie Hunter, board member of the Edinburgh Solicitors Property Centre, said its completions were already down 40% in May and June. The Council of Mortgage Lenders acknowledged that this housing crisis is different from previous... [read full story]