After six months of successive increases in the number of mortgage approvals, January finished with quite a subdued effort.  The British Banker’s Association reported the first month figure to actually represent a four month low for approvals.  The BBA indicated gross lending in January totaled less than 7.8 billion pounds.  In contrast, December finished with more than 8.3 billion pounds in mortgage approvals.  There are a few reasons for the 14% decrease, none of which offer any comfort to those within the UK housing market. 

Some analysts have blamed rising inflation while others have cited overall low consumer confidence for the quick drop.  The inclement weather during the month of January played a part according to others.

David Dooks, statistics director for the BBA commented on the drop in January mortgage approvals, saying: “January’s severe weather impacted adversely on what was already a subdued picture of borrowing”.

Dooks added: “While general economic growth stalls, low consumer and business confidence generates a natural tendency to restrain borrowing appetite, repay borrowing where possible and to build up cash and savings as a buffer.”

As the weather improves approaching spring, so should the mortgage approval numbers occurring within the market.  This should mirror a rise in the number of remortgage approvals as well.  Remortgages remain one of the most overlooked, yet valuable, processes a homeowner can take part in.  The possible benefits of a remortgage range from having an immediate increase in the amount of cash on hand, to significantly lowering a monthly mortgage fee.