http://news.bbc.co.uk/1/hi/8542764.stm

Here at the EveryCloud office we read this article with interest – fewer people getting mortgages is surely pointing towards another slow-down of the housing market? Fewer approvals means fewer buyers means Vendors will need to look at more creative ways of moving on from their properties.

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Best regards

The EveryCloud Team

Figures revealing a sharp drop in mortgage approvals in January have confirmed that the UK housing market made a slow start to the year.

The Bank of England said that the number of home loans approved for house purchases in January fell by 17% compared with the previous month.

The 48,198 approvals was the lowest number for eight months, but still 43% higher than a year earlier.

Experts have said the end of the stamp duty holiday was behind the drop.

The stamp duty threshold dropped back to £125,000 on 1 January, prompting a rush on mortgage approvals and completed home sales in the final months of 2009.

The government concession, which had temporarily pushed the threshold up to £175,000 for just over a year, had been aimed at halting the rapid slump in the property market.

Housing dip

Gross mortgage lending fell from £13.5bn to £10.2bn in January, with commentators also pointing to the severe winter weather as affecting housing market activity.

January is typically a challenging month for savers as many start to repay debt accumulated over Christmas Adrian Coles, Building Societies Association

A range of groups, including the Council of Mortgage Lenders and the British Bankers’ Association, have said that lending and activity dropped at the start of the year.

Last week, Nationwide building society pointed to the slowdown in lending as the reason behind the first fall in UK house prices for 10 months.

The Nationwide said average property values dropped by 1% in February compared with January, with the average home worth £161,320.

All sectors – including the mutual sector – had felt the effects of the slowdown at the beginning of the year, according to Adrian Coles, director general of the Building Societies Association (BSA).

“Activity was subdued and this has been felt by all lenders. Low activity in the month was expected following the surge of buyers aiming to beat the end of the stamp duty relief in December,” he said.

“The adverse weather conditions experienced at the start of the year have further suppressed market activity.”

Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors (Rics), said: “Our judgement is that this downturn in transactions will prove temporary and that buyer interest will have rebounded in the February data.”

The Bank of England figures also indicate that the record low Bank rate of 0.5% – and low variable mortgage rates – has deterred people from signing up to new fixed-rate mortgages. The number of homeowners remortgaging dropped to 23,611 in January, from 27,322 in December.