Further Drop in Mortgage Numbers

Home loan numbers stand at just 31 percent of their year-ago levels, the Bank of England has indicated.

The central bank said today that a total of 36,000 new mortgages were arranged last month - a figure 69 percent less than was registered in June 2007 just prior to the beginning of the credit crunch.

June's result is also 12 percent lower than it was in May, and points towards continuing constriction in the UK mortgage market. The drop was mirrored by a decline in the amount of money lent to borrowers, which hit £3.1 billion for the month.

This figure, which is close to an eight-year low, comes despite the launch of the Bank's £50 billion effort to make mortgages more easily available by agreeing to swap some of lenders' hard-to-value assets with safer government bonds.

Speaking to the Press Association, Howard Archer, chief UK and European economist at Global Insight, said: "[This is] yet more very disturbing mortgage data that heightens concerns over the potential depth and length of the housing market correction.

"The Bank of England data graphically highlights that housing market activity continues to be throttled by stretched affordability and tight lending conditions."