Mortgage approvals down almost 60% year-on-year

Mortgage approval activity for January increased slightly to £7.6bn but fell almost 60% from the same time last year, figures from the British Bankers’ Association reveals.

The January figure is up from the £7.3bn recorded for approved mortgage loans in December, but is markedly down by 59.4% from the previous year.

House purchase loans were up marginally at £2.9bn, from £2.7bn in December.

The January figure is down 56.1% from the same time last year.

Gross mortgage lending remained flat at £9.9bn, a decline of 45.2% from January 2007.

Net mortgage lending rose by £2.9bn in January, compared to £3.3bn for the previous month.

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

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

David Dooks, statistics director of the BBA, says: “The high street banks’ mortgage lending is still seeing double-digit annual growth, albeit in a much slower market.

“Lower borrowing costs and falling property prices have underpinned demand at these lenders, who are providing over two-thirds of all new mortgage lending.”

He adds: “There is only limited demand from households for unsecured credit, while a fall in their deposits in January reflects a tendency to draw on cash or to move into alternative financial products.”