Housing market uncertainty keeps mortgage approvals low

Continued uncertainty in the housing market saw net approvals by building societies in August remain low at £2.8 billion, a 31% decline compared to August 2007 as buyers continue to remain away from the market, according to the Building Societies Association (BSA).

Commenting on the figures, Andrew Gall, Business Economist at the BSA said: "Activity in the housing market remains depressed, so, although the figures for both net approvals and net lending are better than for last month, they still remain low. With the Land Registry data showing a 4.6% annual drop in property prices, and with BSA's own Property Tracker survey showing that more than half of people consider the prospect of future falls in house prices a barrier to house purchase, it is hardly surprising that demand for mortgages is so low."

Turning to the savings figures, Mr. Gall said: "The excellent products and attractive savings rates offered by building societies mean that savers are continuing to view societies as a tried and trusted home for their money in these turbulent and uncertain times."

Building society statistics August 2008

Building society gross lending amounted to £2,770 million in August 2008 compared to £4,277 million in August 2007.

Net lending by building societies in August 2008 was -£38 million compared to £771 million in August 2007.

Approvals in August 2008 were £2,781 million compared to £4,054 million in August 2007.

Building societies had net receipts of £708 million in August 2008 compared to £1,389 million in August 2007.

Building societies had net withdrawals of £269mfrom Cash ISAs in August 2008, compared to net receipts of £124m in August 2007.