Mortgage approvals still low

LONDON (SHARECAST) - The number of mortgages approved last month was down 21% from January 2010, as conditions in the UK housing market continue to be subdued.

Just 28,932 loans were approved for house purchases over January, according to the British Bankers’ Association (BBA).
While this was slightly up from the 28,907 approved in December, it remains below the 36,555 approved a year before, and well under the 70,000-80,000 level considered to be a reflection of a stable housing market.
“We are seeing little change in the borrowing environment for households or businesses at the start of 2011," said the BBA's statistics director, David Dooks.
"In both unsecured borrowing and company finance, the emphasis is on repayment rather than new borrowing."
The average value for mortgage approvals was £135,000, 2.7% lower than January 2010.
Remortgaging loans saw a steady expansion over 2010, with 26,109 loans approved in January, 28% higher than the 20,407 approved the previous year.
Net mortgage lending, which does not account for redemptions or repayments, grew 75% over the month to £1.6bn, from £0.91bn in December, as a result of the poor weather in December, which delayed many home purchases.

While this is a considerable increase, the monthly figure in December was the lowest since June 1999, and lending in January remained substantially below the £2-3bn level seen in 2009.