The number of new loans being granted to individuals by lenders for the purpose of house purchase has fallen once again through the month of June, according to the latest figures which have been released by the Bank of England.

The figures show that net lending in June for new loans had increased by £4 billion, which is nearly half the figure for March, when new loans increased by £7.5 billion. Although these figures include all types of loan, the reason for the decrease is due to a slowdown in new mortgage lending, with new secured loans reaching £3.1 billion in June as opposed to £6.3 billion in March.

Much of the reason for this slowdown is due to the lack of consumer confidence in the housing market at the present time. As house prices continue to fall and banks and building societies continue to struggle with their own liquidity issues, making new mortgage loans harder to obtain and more expensive, many individuals who may have bought property have put off the decision until the market settles down.

The total number of new mortgage loans granted in June was 36,000. However, to put this figure in perspective, the total number of loans granted for re-mortgages was 84,000, more than double that of new lending. This is mainly due to the large number of individuals whose short term mortgage deals have reached the end of their initial period and are desperately looking for an affordable alternative to their existing deal.

Due to the liquidity problems of lenders, coupled with the lack of consumer confidence in the housing market at present, it seems likely that we will continue to see further reductions in new loan numbers, at least for the rest of this year and probably into next year as well.