Loan squeeze sees UK mortgages at a new low
Thursday, January 31st, 2008UK mortgage approvals dropped in December to the lowest in at least nine years and consumer credit fell as banks curbed lending after contagion from the US subprime mortgage market collapse.
Lenders granted 73,000 loans for house purchase, down from 81,000 in November and the least since records began in January 1999, the Bank of England said in London yesterday, Bloomberg News reported. The median forecast in a Bloomberg News survey of 24 economists was 79,000. Lending on personal loans and overdrafts fell to 265 million pounds (US$530 million), the least in 15 years.
Banks have tightened credit standards and are offering fewer mortgages and unsecured loans, threatening to further pinch Britons with record debt, the Financial Services Authority said on Tuesday. Slowing consumer spending and a weakening housing market add to the case for an interest rate reduction by the Bank of England as soon as its next meeting on February 7.