Within the overall approval figures new mortgage lending declined by 14% to 17,773 whereas of more concern was the decline in remortgages which fell by 43% from a month earlier to 29,798.
Consumer credit remains subdued, rising by just £0.2bn, but personal deposits rose by £3.9bn as products offered by the high street banks attracted funds.
BBA statistics director, David Dooks, said of the latest data: “High street banks are still providing two-thirds of all new mortgage lending, although the overall market continues to shrink. The 1.5% November reduction in Bank Rate caused lenders to re-assess product ranges and borrowers to re-consider future borrowing costs, so consequently there was another drop in market activity. Volumes of mortgage approvals reached new lows and, with house prices still falling, the encouragement of lower costs had not filtered through by the month-end, largely because people remain concerned about the impacts of the rapidly slowing economy on their personal finances.
“There was an increase in deposits, in part reflecting the receipt of savings reclaimed from accounts in Icelandic banks.”
