The number of mortgage approvals has sunk again over the past month to a new record low. In June the number of approvals sank 23% to 21,118, 67% less than June last year. 

The British Bankers Association said the number of homes sold in 2008 was likely to be the lowest since the recession at the start of the previous decade. 

The figures for mortgages approved, but not yet actually lent, are considered are a very good indicator of near-term trends in the market. As such, they suggest that the collapse in sales is likely to continue for the rest of the year. 

Although the Bank of England has cut interest rates since the credit crunch started last year, mortgage lenders have generally been moving their mortgage rates in the opposite direction. 

The average two-year fixed rate deal for new borrowers is now around 7%. 

The current collapse in lending to home buyers is outstripping the worst predictions of even the gloomiest commentators.

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