SimplyFinance

Lower Fees Demanded in the Face of Declining Mortgage Approval Numbers

On Tuesday, the British Bankers Association reported that home loan approvals declined from 34,752 in April to 27,968 in May. This May's number is 56.1% lower than the same time last year, and it's the lowest number of mortgage approvals since 1997, when the BBA started recording data on the topic. This upcoming Tuesday, the Bank of England is releasing their report on the topic of mortgage approvals, and the numbers are expected to be even lower due to the wider range of lenders that are surveyed by the BoE. Their data currently shows that the number of approvals has been halved since the end of 2006.

Economist Michael Hume of Lehman Brothers said, "A US-style housing slump looks increasingly likely." He added that the housing market was, "rapidly grinding to a halt under the pressure of higher mortgage interest rates, tighter bank lending standards, and declining confidence."

Despite all the financial turmoil in the housing market, experts believe that policy makers will hold off taking action until there is a severe negative impact on consumer spending. More...