Mortgage approvals thrust in Jan Money

Mortgage approvals fell by 17% during January. Photograph: Toby Melville/Reuters

The series of mortgages authorized for residence purchases dived by 17% during Jan as the housing marketplace suffered a high tumble in activity, sum showed today.

There were 48,198 homebuyer loans in the tube during the month, the lowest turn given May 2009 and the second uninterrupted monthly drop, according to the Bank of England.

The series of remortgages authorized fell to 23,611 from 27,322 in December.

There was additionally a tumble in debt advances, with sum lending shifting to £10.24bn, down from £13.53bn in November.

In new weeks the Council of Mortgage Lenders and British Bankers" Association have additionally reported a pointy tumble in debt approvals in January, both claiming the removal at the finish of last year of the proxy stamp starting point on properties costing in between £125,000 and £175,000 quelled demand.

On Friday, sum from the Nationwide referred to the dump in direct from buyers could already be stuff oneself by to residence prices. It reported a 1.1% tumble in prices in February, citing the stamp avocation shift and the wintry go on as probable factors.

The Bank"s sum show that whilst debt wake up was down in January, consumers" ardour for unsecured borrowing increased.

Net lending by both cumulative and unsecured loans rose by £2bn in January, compared with £1.5bn in December.

Consumer credit increasing by £500m – scarcely stand in December"s £265m enlarge and a noted turnaround from the prior five months when consumers borrowed some-more than they repaid.

However, unsecured borrowing remained well down on the levels seen during the rise of the credit boom, when collectively consumers continually increasing their superb debt by some-more than £2bn a month.

Howard Archer, arch UK economist at OHS Global Insight, pronounced consumers might have borrowed some-more in Dec and Jan to financial spending over Yuletide and the Jan sales.

"Despite January"s enlarge in net consumer credit, it was still pale compared with past norms. Elevated debt levels meant there is an obligatory need for most consumers to urge their change sheets, whilst critical concerns over jobs and the mercantile opinion are causing a estimable series of people to wish to save more," he said.

"Meanwhile, parsimonious credit conditions go on to have it in all formidable for people to borrow, generally unsecured loans."

Separate sum from the Building Societies Association showed savers withdrew a sum of £755m from construction societies and jointly owned banks during the month, some-more than twice the volume cold in December.

The BSA"s director-general, Adrian Coles, pronounced societies were still struggling to capture cash.

"January is typically a severe month for savers as most begin to pay off debt amassed over Christmas. Nonetheless, mutuals will go on to find it formidable to capture savers as prolonged as the bottom rate stays low and the marketplace is twisted by part-nationalised banks," he said.

"We welcomed the voiced removal of Northern Rock"s 100% pledge on savings, and we will go on to run for serve remodel until we grasp a turn personification margin for all deposition receiving institutions."