U.K. mortgage approvals fell to the lowest in 14 years in November as the contracting economy discouraged buyers and financial institutions declined to pass on the central bank’s interest-rate cuts, the British Bankers’ Association said.
Banks granted 17,773 loans for house purchase, down 61 percent from the same month in 2007, the London-based BBA, which represents the U.K.’s biggest banks, said today in a statement. The number of home loans was 20,767 in October.
The British economy shrank 0.6 percent in the third quarter, more than previously estimated, the statistics office said today. While the Bank of England has reduced the benchmark interest rate to the lowest since 1951, banks that have been stung by the global financial crisis are reluctant to lend against houses as their value declines, and potential buyers are concerned about losing their jobs in the slump.