Mortgage approval rates ‘collapse’

The rate of mortgage approvals in the UK has collapsed, according to the Royal Institution of Chartered Surveyors (Rics).

Rics has expressed real concern about the state of the UK’s housing market in response to the latest data from the Bank of England that shows only 58,000 home loan deals were approved during April.

The figure represents a significant fall from the 115,000 mortgage deals given the go-ahead in May of last year and the 73,000 approved in January 2008.

And with millions of people already struggling to become debt free, Rics has suggested that the figures do not bode well for the wider economy.

Simon Rubinsohn, Rics’ chief economist, said: “A collapse in transactions of this magnitude has major implications both for consumer spending and a wide range of ancillary industries.”

It was revealed last week by the BBC that Northern Rock is aiming to significantly increase the number of people it employs to offer mortgage-related debt advice.

Written by Dan Mather