Mortgage approvals hit new record low in June

Mortgage approvals for house purchases dived by more than two thirds in June from a year ago to hit a fresh record low of 21,118, the British Bankers' Association said on Wednesday.

The annual fall was the biggest since the series began in September 1997 and indicates the downturn in the housing market is accelerating.

The figures come just a day after government figures showed the number of homes changing hands almost halved in June, highlighting the difficulties facing estate agents, homebuilders and retailers.

House prices have fallen by almost 10 percent from their peak last August as the credit crunch had made it harder and more expensive to get finance.

"The continuing lack of availability of mortgage finance is proving a major drag on the level of property transactions and is increasingly being felt in the real economy," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors.

Total mortgage lending rose by 3.8 billion pounds in June, well below the previous six-month average of 5.0 billion.