Rics: Decline in mortgages is not surprising

Date:Wednesday 24th September 2008

News that the number of mortgage approvals has fallen has been described as "not altogether surprising" by the Royal Institute of Chartered Surveyors (Rics).

The British Bankers Association (BBA) released data showing that the number of approvals for house purchase continues to be very low.

Approvals for remortgaging also fell.

In August, net mortgage lending rose by just £2.1 billion, less than half the average rise over the last six months.

BBA statistics director David Dooks said that falling property prices, households' financial strain, stricter lending criteria and the news of the stamp duty holiday had all "suppressed or delayed demand in August".

Simon Rubenstein, Rics chief economist, said that while the stamp duty announcement would have helped boost the housing market, this would have been "overshadowed" by concern over the turmoil in the global financial markets.

Mr Rubenstein also said a "renewed focus on risk" meant the cost of wholesale money had increased and this would result in higher mortgage rates "before too much longer".