Purchase approvals plummeted as buyers stayed at home in January

A fall of more than 10,000 in house purchase loan approvals in January has been blamed on bad weather and a seasonal dip.

House purchase approvals declined to 35,083 in the month, according to figures from the British Bankers’ Association.

The statistics, which record lending by big high street banks, show that January lending was substantially down on the 45,650 seen in December, and also down compared with the average of 42,582 for the previous six months.

January approvals plummeted after being boosted in December ahead of the end of the Stamp Duty holiday.

The BBA says the decline in approvals could also reflect the freezing weather at the time.

Remortgage approvals for January fell to 20,252 from 23,609 in December, again below the previous six-month average of 23,451.

Meanwhile, gross mortgage lending weakened to just £8bn from £10.9bn the previous month.

David Dooks, statistics director at the BBA, says: “After the Christ-mas period demand for consumer credit was weak as consumers were discouraged from spending by the icy weather. Many hung on to their deposit money.”

But David Whittaker, managing director of Mortgages For Business, says he is surprised the drop was not bigger.
He says: “I’m surprised at how well mortgage lending figures have stood up. With January heralding the end of the Stamp Duty holiday and

weather conditions that Van-couver could only dream of I expected these figures to be considerably worse.

“As it stands, the market seems well placed for a pick-up in lending in the next two or three months.”

He adds: “Demand for new mortgages is rising and products are being introduced daily. We may be starting from a low base but I expect to see an improvement in these figures as we move into the spring.”