Mortgage lending plummets 95 per cent

Mortgage lending in August fell by 95 per cent when compared with July''s figures, according to the Bank of England.

The figures show that banks and building societies in the UK handed out just £143 million in homeowner loans last month.

A total amounting to five per cent of July''s figure of £2.9 billion and two per cent when compared with the amount lent in August 2007.

Howard Archer, of Global Insight, said: "The dire Bank of England mortgage data shows that housing market activity is being decimated by the highly damaging combination of stretched buyer affordability and tight lending practices."

According to the Telegraph, the announcement comes as a series of lenders push up their mortgage rates.

Lloyds TSB has increased the cost of its two and three-year fixed-rate deals, meanwhile, nationalised lender Northern Rock is expected to raise the prices of its entire catalogue of fixed-rate and tracker mortgage deals today.

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