According to a recent report mortgage approval levels have fallen to an all time low, falling from 72,000 in February to just 64,000 in March. The figures come from the Bank of England, and show that mortgage approvals have fallen to the lowest level since records began in 1999. The figure for this March reflected a fall of 44% on the same period for the previous year, showing just what an effect the mortgage meltdown and housing slowdown has had.

A number of factors are thought to have affected the mortgage lending levels in the UK. This includes a lower level of demand from buyers, every tightening lending conditions from lenders, and a lack of affordability fuelled by high house prices and rising living costs. Many lenders have withdrawn mortgage loans deals from the market, and many others have raised interest rates on mortgages as well as increasing the amount of deposit require from borrowers, all of which has impacted on affordability levels.

One broker stated: "First of all a significant number of lenders have just pulled out of the market completely and also it's the big lender groups that have actually got access to funds." An economist from the Royal Institute of Chartered Surveyors stated: "The news that mortgage approvals dropped to a record low of 64,000 is hardly surprising given that lenders have been aggressively scaling back on the provision of finance to homebuyers due to the credit cards crunch." 

The government has launched a £50 billion scheme that will enable mortgage providers to exchange mortgage assets for government bonds, which it hopes will increase confidence and boost affordable inter-bank lending. One official said: "The Bank of England's Special Liquidity Scheme, if it works, might stop things getting much worse. But lenders will remain cautious."