Mortgage lending hits new low

Further evidence of a cooler housing market emerged today when figures showed approvals for house loans at their lowest level in six years.

The British Bankers' Association said loans approved for house purchases were 43% lower in January than the same month last year and 34% lower by value.

Gross mortgage lending was £11.6bn in January, 18% lower than in both December and January of last year.

Meanwhile net mortgage lending - excluding repayments - rose by £4.2bn in January compared to a £5.2bn rise in December and an average of £4.5bn during the past six months.

Remortgaging was the only area where demand held up, with loans 8% lower by number but 5% higher by value.

BBA director of statistics David Dooks said approvals for house purchases and equity withdrawal were very weak, even for a January, when the market traditionally slows.

He said: "The only area of demand holding up is remortgaging, where borrowers continue to find good deals to reduce their borrowing costs."

The BBA also reported stronger consumer credit reflecting higher demand for personal loans and overdrafts after December's weak figure. New lending on personal loans and overdrafts stood at £2.8bn, well up on December but a lower than the average for the previous six months.