UK Mortgage Approvals slump.

So far this month banks have issued 64,000 loans for house purchases, compared to the 72,000 in February, which is the lowest number of approvals for over nine year as the banks are suffering from the effects of the credit crunch and the fact that despite the involvement of the government are still seemingly concerned by the asset value of mortgages.

Economists had predicted the fall to be a little less steep, numbering around the 66,000 mark.

The government initiative to swap government bonds for mortgage securities in a bid to restore the lost confidence in the financial system should have had a direct and positive impact on the mortgage market.

Despite the move by the government to re-establish the confidence of banks and encourage inter bank lending in order to free-up credit it seems as though the banks have not responded in the way that the government has hoped.

The mortgage approval figures themselves indicate the extent of the current economic situation on the housing market.

Net lending on homes is also at its lowest ebb for three years, down to 6.9 billion pounds.

HBOS Plc, the country’s biggest mortgage lender is seemingly facing adversity as it plans to announce a 4 billion pound rights issue in order to boost capital, although their share price has remained stable.

With house prices down on average by 2.5%, it is both the banks and their customers who are suffering at this present time.

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