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Mortgage approvals are down by almost 60% year-on-year

Mortgage approvals rose slightly in January from £7.3bn to £7.6bn compared with the previous month but the total was down almost 60% on January 2008, figures from the British Bankers’ Association reveal.

January house purchase loans were up marginally at £2.9bn compared with £2.7bn the previous month, while gross mortgage lending was £9.9bn – a decline of 45.2% since January 2007.

Despite this, annual growth for net mortgage lending was up 10%.

Personal deposits fell by £2.3bn as a result of savers seeking alternative products.

David Dooks, statistics director at the BBA, said: “High street banks’ mortgage lending is still seeing double digit annual growth, albeit that this is in a much slower market than before.

“Lower borrowing costs and falling property prices have underpinned demand at the high street lenders that are providing more than two-thirds of all new mortgage lending.”

He added: “We are seeing limited demand from households for unsecured credit at the moment, while the decline in deposits reflects a trend towards consumers drawing money from their cash reserves or moving to alternative financial products.”

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