One thing has defined the UK housing market through the entire year of 2011 – unpredictable.  What will define the market in 2012, remains to be seen.  Mortgage approvals will definitely help define the market for the coming year.  But in order to look forward for possible developing trends this year, one must look back.  Approvals unsuspectingly caught fire in the late months of 2011, and a two year high was attained in the month of November.  According to the Bank of England, more than 52,800 approvals were processed that month.  Remortgages were hot during the middle of 2011, but quickly slowed to figures not seen since June 2010.

Samuel Tombs of Capital Economics described the surge of approvals in November as one that defies economic logic.  He commented on the surprising figures, saying: "We fear that approvals for new house purchase might soon start to fall as banks further restrict the availability, and raise the price, of credit in response to the deterioration in wholesale funding markets."

He added: "Indeed, with the labour market on course to deteriorate rapidly in 2012 and the Eurozone crisis showing no signs of abating, it seems likely that housing market activity will remain pretty weak."

David Braithwaite, director at Citrus Financial Management, believes the digression in remortgages is associated with a decrease in home equity levels.

He commented on the near future of the market, saying: "Looking forward, 2012 will be about matching willing borrowers with reluctant lenders. At best we'll be moving sideways.

"The problem is that borrowers are hesitant to borrow and lenders aren't overly keen to lend - and the problem gets worse at higher loan-to-value rates, the very area where we need to see movement and improvement."