January sees significant fall in approved mortgages

The British Bankers' Association (BBA) has said that the number of mortgages approved for home buyers by the UK's biggest banks "fell sharply" throughout January.

The BBA said this was largely due to an influx in buyers looking to borrow in December in order to to beat the re-introduction of the lower stamp duty threshold.

BBA members approved home buyers with around 35,000 new mortgages last month, down from 46,000 the previous month.

Meanwhile, the number of UK home sales halved in January, according to figures from the UK tax authority.

The BBA figures showed that in January, total mortgage lending fell to the lowest monthly amount in eight and a half years to just £8bn.

Although the stamp duty changes did appear to be mostly to blame, the association also said the cold weather was likely to have deterred would-be home buyers.

"It was no surprise to see the January mortgage figures falling back from December, when transactions were being pushed through to beat the end of stamp duty relief," said the BBA's statistics director, David Dooks.

"There was a natural reaction in the January figures and the bad weather further suppressed market activity," he added.

Figures published by the Council of Mortgage Lenders (CML) last week. echoed those from the BAA.

The CML also added that the significant fall in mortgage lending last month was due to a rush of people looking to qualify for the government's temporary stamp duty holiday and buy homes before it ended on 1 January.

Melanie Bien, of Savills Private Finance, said: "There has been a big hangover from the stamp duty holiday."

"The very poor weather conditions meant everything ground to a halt," she added.

But she did say that the housing market was expected to be entering a busier period very soon.