Following reports last week detailing a decrease in the number of house sales in the UK over the past year, it is probably not surprising to learn that the total number of mortgages and homeowner loans which have been approved have also fallen by similar figures.

According to statistics from the British Banking Association (BBA) the total number of loans fell by 56.6 per cent in September this year, compared with the same point last year.

There were a total of 23,442 new loans for house purchases approved through the course of September, whereas at the same time last year, the figure was approximately 54,000. This is a graphic indication of how the housing and loan markets have been hit during the past twelve months, not to mention the wider UK economy as a whole.

There is some more positive news however, as despite the fact that new home loans are down on the same time last year, there has been an increase in the number of mortgage loan approvals since the previous month.

New loans for house purchases increased by 8.8 per cent above the figure for August and the number of remortgages also increased from 47,260 in August to 51,523 in September. Overall there was an increase of £1.5 billion in new mortgage loans above the figure for August and hopefully this trend will continue, following the Government’s recent rescue package and the reduction in the Bank of England base rate of interest.

David Dooks of the British Banking association said “It was not surprising to see continued low levels of mortgage lending approvals in September, ahead of the Government’s banking support announcements. Compared to a year ago, the mortgage environment has changed significantly, with supply restricted as a consequence of the situation in financial markets and demand at a much reduced level.”