Mortgage approvals fall at banks

Mortgage approvals by the UK’s biggest banks fell slightly in January, said the British Bankers’ Association (BBA).

The number of mortgages approved for house purchase last month was 44,804, a fall of some 1% from the figures from 12 months previous

The BBA spokesman said that despite the recent rises in interest rates, lending had not yet begun to subside.

A week earlier, the Council of Mortgage Lenders said January had produced record levels of lending.

“January saw a continued stable demand for mortgages,” said David Dooks of the BBA.

“Actual borrowing on mortgages remains strong compared with this time last year, so the impact of higher interest rates has yet to feature.”

Potential Slowdown?

Some reports have suggested of an impending slow down in the housing market, are these more unfounded rumours?

The three quarter-point increases in interest rates since last summer should, most economists believe, inevitably slow down the property market in due course.

“It was notable that underlying mortgage approvals were down by around 1% year-on-year in number in January,” said Howard Archer of Global Insight.

“This was the second successive month that approvals were down year-on-year, and contrasts with the substantial year-on-year increases seen through much of 2006.”

Other recent indications of an impending slowdown have come from the Royal Institution of Chartered Surveyors.

Its regular surveys over the past few months have noted a decline  in the number of enquiries being made by new buyers.

The mortgage approval figures from the BBA cover about half the mortgages lent in the UK.