New mortgage approvals from the major banks fell by another 23 per cent in June to a new record low. This is according to the British Bankers’ Association (BBA), which said its members, who account for roughly two-thirds of mortgage lending, approved only 21,118 new home loans in June, a reduction from 27,499 in May and a figure that was 67 per cent lower than in June 2007.

Following a collapse in sales and a fall in house prices, the BBA also remarked that the number of homes sold in 2008 was likely to be the lowest since the recession at the start of the previous decade.

According to statistics director David Dooks, ‘Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990s’. The figures for mortgages approved but not yet actually lent are considered a good indicator of near-term trends in the market and, as such, suggest the collapse in sales is likely to last for the rest of the year.

There was a similarly grim prognosis from the Royal Institution of Chartered Surveyors’ chief economist, Simon Rubinsohn, who stated that the ‘continuing lack of availability of mortgage finance is proving a major drag on the level of property transactions and is increasingly being felt in the real economy.’