Approvals for remortgaging fell to 30,595 in December but were still higher than the previous six-month average of 29,362, while approvals for other purposes, 20,173, fell in December and were lower than the previous six-month average of 23,597.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, says: “If a reminder of the challenges currently facing the housing market was needed, today’s Bank of England figures do just that. The number of residential mortgages dropped in December to the lowest level since March 2009. It is easy to blame poor weather, which clearly had some impact on the market.
“But on the other hand, the generally disappointing activity data through the latter part of 2010 is broadly consistent with the RICS Housing Market Survey’s negative picture on the number of buyer enquiries.”
He says looking forward, some rebound in the January numbers is likely if only because of the better weather conditions.
But adds: “However, with lending still constrained, and mortgage rates edging up under pressure from developments in financial markets, it is hard to see mortgage approvals picking up markedly. Indeed, for the whole of 2011 we see activity in the housing market at a broadly similar level to that recorded last year.”