Mortgage approvals drop 18%

New mortgage approvals for house purchase dropped 18% in March compared with February, according to the British Bankers Association.

The BBA said that there were just 35,417 new mortgages approved n March, representing a 46% fall compared to March last year and the lowest monthly figure since September 1997.

All forms of lending, not just mortgages, were being restricted by the lack of funds. David Dooks, statistics director for the BBA, said: The consequences of low banking sector liquidity show up clearly in March data. Reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals.

Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on cards.