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 The British Bankers Association (BBA) has claimed today (June 24th) that new loans for house purchases have fallen dramatically in May compared to the equivalent period of last year.
Research conducted by the organisation suggests that just £4.3 billion was lent during the month, a fall of 56.8 per cent from May 2007 and comfortably below the previous six-month average of £6.4 billion.
In addition, there were a total of 27,968 loans for home purchase approved in May, which represents a 56.1 per cent drop from the figure recorded a year ago.
"Measures of mortgage activity were lower in May as a result of tighter lending criteria and economic pressures on households," said BBA statistics director David Dooks.
The BBA also confirmed that UK consumers are being forced to spend more and more money on their credit cards.
Total credit card purchases stood at £7.5 billion last month, which was again slightly above the six-month average and an increase of 4.8 per cent from May 2007.
Howard Archer, an analyst at Global Insight, added: "Rising debt levels, low household savings rates and lower equity prices mean that there is a pressing need for many consumers to improve their finances."
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