The slight increase in approvals in January was not indicative of a wider trend within the mortgage market as was hoped, after the number of applications being accepted by lenders fell by a further 3.5 per cent in February.
With only 71,400 (seasonally adjusted) approvals in February, the figure is the lowest that has been recorded for the month since Bank of England records began in 1993. It is second only to June 2005 as the lowest level on record.
Experiencing a decline in the ten out of the last twelve months, approvals have dropped by 40.5 per cent since February 2007.
Ross Bowen, managing director of Connells Survey & Valuation cited increasing wholesale prices and sapped buyer confidence as prime factors, advising: “February’s fall in mortgage approvals is not as dramatic as the fourth quarter of last year, but it does reflect both reduced appetite for borrowing and a tighter supply of lending from mortgage providers.
"We are seeing stronger demand for remortgage business than for new mortgages. Those with plenty of equity in their homes or large deposits have much more flexibility and can borrow more freely, but first-time buyers and those with a poorer credit history are struggling to find lenders who can help them."
