Number of approved mortgage loans falls in September

Loans approved for house purchases were 57 per cent lower in September 2008 than in the same month last year, new figures show.

According to the Council of Mortgage Lenders (CML), the number of loans approved for remortgage were also down, falling by 15 per cent compared to August.

CML director general Michael Coogan remarked that mortgage activity has reached "exceptionally low levels".

He said: "The government should consider what other measures can be brought forward to enable the market to transact more easily.

"Banks and building societies do want to support homeowners, but they have limited funds available and are, quite reasonably, taking a prudent approach to risk."

On the positive side, the new stamp duty threshold introduced by the government earlier this year has had an impact.

Figures from September indicate that the number of homebuyers that were not required to pay stamp duty more than doubled, rising to 51 per cent, compared to just 22 per cent during the same period in 2007.