Mortgage lending 'down 11%'
Mortgage lending by Britain's banks was down by 11 per cent in June compared with the same month in 2010, new figures have shown.
A report by the British Bankers' Association (BBA) showed lending totalled £7.6 billion last month, as activity in the housing market remained sluggish.
The number of house purchase approvals was slightly higher in June than in the previous month at 31,747, but six per cent lower than a year ago.
Meanwhile, the average approval value was £149,700 in June, 0.6 per cent lower than in the same month in 2010.
BBA statistics director David Dooks said: "Banks continue to lend for house purchase but the weak mortgage market is self-evident, although some growth is coming from the
buy-to-let sector to meet demand for rental properties. Personal deposits are growing only slowly as some people may be using savings to pay higher household bills."
Howard Archer, chief UK economist at IHS Global Insight, said the figures support his view that house prices will fall by around five per cent by mid-2012.
"The main support for house prices will come from the fact that interest rates are likely to remain very low compared to long-term norms for some considerable time to come," he added.
"Indeed, it is looking ever more likely that the Bank of England will hold off from raising interest rates until at least mid-2012."
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