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New information from the BBA shows the amount of mortgages approved in October  was more than 50% down on the same period last year.

They stated 21,854 mortgages were approved for house purchase in October, the second lowest on record. The number was slightly up on August figures which were  the worst month on record, but mortgage lending is down 52 % than that of October 2007.

The amount of mortgages approved for remortgaging fell by 6.4 per cent over the year, to 52,425. Net mortgage lending rose by just £2.9 billion, compared with £3.5bn in September and an average for the previous six months of £3.9bn.

The BBA said the government’s support for banks, along with lower interest rates, would help consumer demand in th future.

But recovery prospects remain along way off, according to Howard Archer, chief UK and European economist at IHS Global Insight.

He stated “Even if the government measures to tackle the financial crisis work on a sustained basis, it will clearly take time for confidence to improve and mortgage lending to pick up significantly.

“On top of this, affordability ratios in terms of house prices to earnings are still relatively stretched despite coming down significantly in recent months.”