Mortgage approvals fell to their lowest levels since July 2012 in February, according to research from e.surv chartered surveyors.
The latest mortgage monitor report shows house purchase lending fell by 11 per cent over the same period, down from 54,719 in January to 49,019.
E.surv suggests the downturn is due to weakening borrower demand rather than a decline in the availability of mortgages.
E.surv business development director Richard Sexton says: “House purchase lending has fallen despite a wider and cheaper range of mortgages on offer from lenders. The root cause is difficult to discern: the bad weather at the beginning of the year and a fall in demand for mortgages, rather than a tighter supply of the, may both be factors. More would-be buyers are focusing on consolidating and paying off debts, and are reluctant to purchase a new home while their finances are being pillaged by high inflation and record-low savings rates.
“High LTV lending increased as a proportion of overall lending in February, and now accounts for 1 in 8 loans compared to just 1 in 11 during most of 2011, suggesting the availability of mortgages for first-time buyers is actually improving.”
Lending to borrowers with a deposit of 15 per cent or more increased to 12.3 per cent, or representing one in eight loans. The average LTV rose to 61.3 per cent.