- 03
- Jun
It has been revealed that mortgage approval rates have plummeted to a record low recently, compounding fears that the slowdown in the housing market has spread to the wider economy.
The figures were released by the British Bankers Association (BBA) and show that just 44,105 home loans were lent by its members last month. This is the lowest level since they started recording home loan approval rates back in 1997. This figure is down by 37% on the same time last year.
The government has also released figures showing that the economy is beginning to hit a slow down as well. It had been predicted that the economy would grow by 0.8% in the third quarter of the year, however because of the impact of the credit crunch and the rise in interest rates gross domestic product only grew by 0.7%.
The chancellor Alistair Darling has a target of 3% growth in the economy this year and despite the slowdown the economy is still well on track to meet those growth targets. Growth is now expected to be 3.2% instead of the 3.3% that economists had been predicting.
One of the lead economists for the Royal Bank of Scotland (RBS), Geoffrey Dicks stated that “the third quarter market the slowest economic expansion for a year and serves to emphasis that the economy passed its cyclical peak even before the full impact of the credit squeeze.”
