Bank witnesses fall in mortgage approvals

The UK witnessed a slight dip in the number of mortgages approved for home purchase during December 2009.

According to the Bank of England, approvals stood at 59,023, down from 60,045 in November - but above the average of 55,004 seen over the past six months.

Total net lending secured on dwellings increased by £1.2 billion, but this was below the revised November increase of £1.6 billion.

Howard Archer, chief UK and European economist at Global Insight, said the dip in mortgage approvals was "somewhat surprising".

He added: "Housing market activity could have been lifted to a limited extent at the end of 2009 by buyers looking to beat the price threshold for stamp duty on house purchases moving back down to £125,000 in January.

"The dip in mortgage approvals in December reinforces our suspicion that housing prices are likely to suffer a limited relapse during the coming months."

Last month, the Council of Mortgage Lenders reported that mortgage lending rose by 14 per cent during December 2009.

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2010-02-02 13:00:29 © Moneyextra.com