Mortgage approvals fell by 19 per cent year-on-year in January, according to figures published last week by the Bank of England.
Around 101,200 mortgages were approved in January, down from 124,396 a year earlier. By value, approvals fell by 13 per cent from £18.4bn to £16.1bn over the same period.
The number of purchase approvals plummeted by 20 per cent from 75,559 in January 2014 to 60,786 a year later, while the value of these approvals fell by 12 per cent, from £12.2bn to £10.7bn.
The remortgage slump continued in January, with approvals falling by 9 per cent from 35,993 to 31,640. The value of those approvals was 12 per cent lower year-on-year, dropping from £5.6bn to £5.1bn.
Loans for other purposes, including further advances, saw the biggest decline, with the number of approvals tumbling by 32 per cent from 12,924 in January 2014 to 8,774 in January this year. By value, they totalled £532m, down by 22 per cent from £683m at the same point last year.
Phoebus Software managing director Paul Hunt says: “The number of mortgage approvals in January was, as expected, lower than the average over the previous six months.
“There is, of course, the seasonal element to be considered; historically, January has always been a quieter month after the Christmas holidays.
“However, there are definite markers for an improving market with the availability of higher-LTV products and longer-term mortgages, and sellers now understanding the difference that the new stamp duty rules have made to their ability to move up the ladder.
“Add to this improved real earnings and lower-than-expected inflation and we have a landscape that, even with the impending election, is likely to tempt sellers and buyers into the market.”