Mortgage approvals for house purchase feel 3.5% last month, reversing January’s slight recovery.
Connells Survey and Valuation, part of the Connells group, has revealed that mortgage approvals fell from 71,400 compared with 74,000 in January.
Year-on-year, approvals have declined 40.5%, making February’s decline the 10th in the last 12 months.
But non-seasonally adjusted approvals rose to 65,400 from January’s 50,000. The firm also says it is seeing stronger demand for remortgage business.
Ross Bowen, managing director of Connells Survey and Valuation, says: “Money market rates have climbed again in recent weeks, keeping mortgage rates relatively high, despite February’s cut in base rates. Meanwhile, confidence among home buyers is more subdued.
“Those with plenty of equity in their homes or large deposits have much more flexibility and can borrow more freely, but first time buyers and those with a poorer credit history are struggling to find lenders who can help them.”
Connells also reveals that house prices were almost unchanged in February at £216,143.
The mix-adjusted standard house price was just 4.5% higher at the end of February than 12 months previously, meaning that house prices have risen only fractionally ahead of retail price inflation over the last year.
Bowen adds: “A slight improvement in the prices of two bedroom homes kept house prices flat in February. Larger homes, and one bedroom properties dropped slightly in value.
“But the market is showing no signs of a major correction, and there are very few forced sellers. It’s becalmed – and that’s no surprise given the lack of availability of mortgage finance.”