This week, research from Connells Survey & Valuation showed that mortgage approvals for house purchase increased 3% in January to 75,300 from the December figure of 73,000. Non seasonally adjusted approvals also rose to 50,600 from 50,000 in December.
Although this was the first increase in mortgage approvals since May 2007, the January figure was weak and compared to January 2007, the decline in approvals was 38%.
Commenting on the housing market, Ross Bowen, managing director of Connells Survey & Valuation, said:
"The housing market remains quiet and the MPC must remain focused to stimulate growth. In spite of a boost of 3% in January's mortgage approvals, last month's figure is the weakest January since Bank of England records began in 1994. Year on year, activity has seen a drop of nearly 40%. The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. This sector has seen its share of the purchase market fall from 15% this time last year to just 11% at the start of 2008. Rental yields are not performing as well as other forms of investment and the incentive to invest relies on the long term capital gain available. Having said that, this is just one month’s numbers and a formal trend is yet to emerge."
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