Mortgage approvals fall in January12: 29 01/03/2010, Hilary Osborne, Business, guardian.co.uk, housing market, money, mortgage rates, mortgages, news,

Mortgage approvals fall in January12: 29 01/03/2010, Hilary Osborne, Business, guardian.co.uk, housing market, money, mortgage rates, mortgages, news, property news, UK, Guardian Unlimited

Home loans at lowest level since May 2009 and suffers second consecutive monthly fall

The number of mortgages approved for house purchases fell 17% during January as the housing market suffered a sharp drop in activity, figures showed today.

There were 48,198 loans to home buyers in the pipeline during the month, the lowest level since May 2009 and the second consecutive monthly drop, according to the Bank of England.

The number of approved DUI was reduced to 23,611 from 27,322 in December.

There was also a decline in mortgage advances, loans, gross slip to £ 10.24bn, down from £ 13.53bn in November.

In recent weeks the Council of Mortgage Lenders and the British Bankers' Association have also reported a sharp fall in mortgage approvals in January, called for the withdrawal by the end of last year the threshold for temporary seal of the properties of a cost between £ 175,000 and £ 125,000 of demand drowned.

On Friday, figures from the country indicate that the fall in buyer demand and could be feeding through house prices. It reported a 1.1% drop in prices in February, citing the change in stamp duty and winter weather, as possible factors.

World Bank figures show that while mortgage activity fell in January, the consumer appetite for unsecured loans greater.

Net lending through secured or unsecured loans increased by 2 million pounds in January, compared with £ 1.5 billion in December.

Consumer credit rose by £ 500 million - nearly double December GBP 265 million increase and a marked change of the last five months, consumers pay more than they paid.

However, unsecured loans remained well below levels seen during the heyday of the credit boom, when consumers collectively regularly increased its outstanding debt by more than 2 million pounds per month.

Howard Archer, chief economist at Global Insight SST, said consumers may have acquired in December and January to cover the cost of Christmas and January sales.

"Despite the January increase in net consumer credit was still muted compared with previous standards. High levels of debt means that there is an urgent need for many consumers to improve their balance sheets, while serious concerns about employment and economic prospects are causing a considerable number of people want to save more, "he said.

"Meanwhile, tightening credit conditions are generally difficult for people to borrow, especially unsecured loans.

Separate figures from the Building Societies Association showed savers withdrew a total of £ 755 million building societies and mutually owned banks during the month, more than double the amount withdrawn in December.

The director of the BSA, in general, Adrian Coles, said companies are still struggling to attract cash.

"January is usually a difficult month for savers, as many are beginning to pay off the debt accumulated over Christmas. However, mutual still have difficulties to attract savers, provided that the base rate remains low and the market is distorted by the partial nationalization of banks, "he said.

"We welcomed the announced withdrawal of 100% guarantee on savings from Northern Rock, and we'll keep pushing for further reform to ensure equal conditions for all depository institutions.

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Hilary Osborne


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