New low for new mortgages

Official Bank of England figures have shown a record low in the number of new mortgages approved for the second month in a row for April 2008. With only 58,000 mortgages for homebuyers being approved in April, that was less than half the 107,000 recorded in April 2007. These monthly figures are the lowest since records began in 1993 and are a worrying drop on the previous 12 months' peak of 115,000 in May 2007.

Simon Rubinsohn, Rics chief economist said: 'The latest weak data on mortgage approvals highlights the continuing problems facing borrowers trying to secure finance to purchase property.

'Lenders are continuing to tighten up on the conditions accompanying new loans making it hard for first-time buyers to take advantage of the modest fall in house prices seen over the part few months.

'This highlights very clearly the real problem facing not just the property market but also the wider economy.

'A collapse in transactions of this magnitude has major implications both for consumer spending and a wide range of ancilliary industries. Although a supportive response from the Bank of England is improbable in the near term, the persistence of such a trend could force the hand the authorities as autumn approaches.'