Mortgage Demand At Lowest Level Under Labour
Across the whole of the market, the demand for mortgages of all types has dropped to its lowest level since Labour came to power in 1997.
The British Banker's Association's figures for March 2008 have shown at 46.2% reduction in the number of approved mortgages from the same month in 2007.
In February this year there were over 43,000
approved mortgages but this figure dropped to 35,417 in March. This is the first time the figure has been less than 40,000 since 1997.
To attempt to rectify this problem, the chancellor of the exchequer, Alistair Darling has been urging lenders to pass on the full benefit of the recent cut in interest rates from the Bank of England. He explained that this would help to stop a full blown crash in house market prices which showed a sharp drop in March. The March prices are however still higher than 1 year ago.
Since the Bank of England announced its
interest rate cut, the inter-bank borrowing rate has risen again. Which can only mean continued tightness in the credit markets. This has happened despite the £50bn announced in extra lending available to the banks, in exchange for their mortgage and credit card debts.