Mortgage approvals rose in January for the first time since May 2007, but the market remains weak, according to research by Connells Survey & Valuation.
However, January 2008 is the weakest start to a year since records began in 1994, indicating a marked slowdown in the mortgage and housing markets.
Seasonally adjusted figures for mortgage approvals show a rise of 3% in January, up to 75,300 from 73,000 in December 2007, the first increase in approvals since May last year.
However, approvals have fallen 38% compared with January 2007, when almost 125,000 mortgage were approved, while approvals have reached their worst January level since Bank of England records began in 1994.
Commenting on the findings, Ross Bowen, managing director of Connells, says: “The mortgage market may finally be finding a floor after months of decline caused by higher interest rates, the reduced supply of credit from mortgage lenders and the lack of consumer confidence. We should not read too much into one month’s numbers, this is still the weakest market in 13 years and the ongoing impact of HIPS following full implementation in December is unknown.”
Connells says it has observed a rise in houses coming onto the market, and renewed demand from buyers, but says lenders must pass on the latest base rate cut to help stimulate demand.
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