(LONDON) UK mortgage approvals slid in August to the lowest since at least 1999 as the global credit squeeze prompted banks and building societies to curtail credit.
Huge slump: House prices in the UK fell an annual 6.2 per cent in September, says Hometrack, a London-based property research group that has been following property prices since 2001Lenders approved 32,000 loans for house purchases, down from 33,000 in July, the lowest since comparable data began nine years ago, the Bank of England said.
The value of those loans fell to £143 million (S$370 million), the lowest since April 1993.
The worst house-price slump in at least a quarter century and a tightening global credit squeeze threaten to push the economy into its first recession since 1991. Central bank policy maker Kate Barker said last week that market turmoil may constrain bank lending 'for a considerable period'.
'The reading is very low, and consistent with a further decline in house prices,' said Alan Clarke, economist at BNP Paribas SA.
'With credit conditions likely to tighten further, the supply of credit will deteriorate.' Economists had forecast that UK lenders would approve 30,000 new home loans last month, according to the median of 27 estimates in a Bloomberg News survey.
During the past month, the Bank of England joined a coordinated effort by world central banks to increase the availability of dollars and ease money-market strains, with new auctions of overnight and one-week funds totalling US$40 billion.
UK authorities earlier yesterday seized the lending book of Bradford & Bingley p+lc, the nation's biggest lender to landlords, and forced the company to sell its savings accounts to Banco Santander SA, Spain's biggest lender, after it had trouble financing its daily operations.
For lenders facing global financial-market turmoil, 'the adjustment is proving highly painful and it is clear that lending by UK banks will be very constrained, relative to the past few years, for a considerable period', Ms Barker said on Sept 25.
UK house prices fell an annual 6.2 per cent in September, Hometrack, a London-based property research group that has been following property prices since 2001, said yesterday. Prices fell by the most in a quarter century in August from a year earlier, HBOS Plc, whose survey began in 1983, said on Sept 4.
Households, which have a record £1.4 trillion of debt, added to their unsecured borrowings, yesterday's report showed. Net consumer credit, which includes credit cards, personal loans and overdrafts, rose by £1.2 billion.
Bank of England policy makers voted to keep the key interest rate at 5 per cent this month as inflation quickened to 4.7 per cent, more than double the target. The economy's growth rate stalled in the second quarter.
The bank will make its next interest-rate decision on Oct 9. -- Bloomberg
.jpg)
No comments:
Post a Comment