BeritaTREN.COM

Home ownership is a disappearing dream for millions of young adults, figures reveal.

The total value of all home loans approved in June was down by 11 per cent on the same month last year to £7.6billion.

At the same time, the number of new loans for home purchase was down by 6 per cent on a year ago to 31,747.

Home signal: The value of mortgage loans has fallen by 11 per cent

Anxiety about debt, the economy, rising household bills and unemployment mean that millions are trying to avoid borrowing of all types.

City analysts believe such is the weakness in the housing market that prices will fall by an average of 5 per cent by next summer. At the same time, it is thought the Bank of England is now unlikely to raise interest rates until the middle of 2012 at the very earliest.

The home loan figures were published by the British Bankers’ Association and form part of a wider picture of an economic slowdown.

Household borrowing on credit cards, personal loans and overdrafts is down, which is killing spending on the High Street, creating real problems for retailers.

At the same time, businesses are paying back more than they are borrowing, which is a threat to investment and jobs.

The BBA said: ‘Demand for unsecured borrowing remains weak with repayments continuing to outweigh new lending.

‘Borrowing on cards has expanded only slowly over the past two years - and largely relates to the interest added to accounts, because spending is regularly more than offset by repayments.’

People are turning to their savings to cover big increases in must-pay bills, such as food, petrol and energy.

As a result, the amount of money people are saving increased by just £6.1billion in the first half of 2011, compared to £15.9bn in the same period last year.

Looking at business lending, the BBA said firms, particularly those in construction, are paying back more money than they are borrowing. Lending to non-financial companies was down by £2.5billion in June.