Mortgage lending stalls in August

(Reuters) - Approvals for new home loans in Britain fell to a series low in August while net mortgage lending slowed to a standstill, figures from the Bank of England showed on Monday.

The BoE said approvals fell to 32,000 last month from 33,000 in July. While marginally higher than analyst forecasts, it was the lowest since the series began and means approvals are running at less than a third of their total this time last year.

Net mortgage lending collapsed to just 143 million pounds in August, its lowest since the series began in April 1993 and a fraction of the 2.998 billion pounds lent in July.

The figures highlight the extent to which the credit crunch has taken the lifeblood out of Britain's housing market, with banks reining in lending and house prices tumbling.

The nationalisation of Bradford & Bingley, Britain's biggest provider of buy-to-let and self-certification mortgages, is likely to reduce the supply of mortgages still further.

The Bank of England has held interest rates steady at 5 percent since April but a deluge of bad news on the economy and further stress in money markets has raised expectations of a cut soon, despite inflation running at more than double the central bank's target.