January mortgage approvals increase

Mortgage approvals have increased from January, indicating the slowdown in the housing market is not as severe as was expected.

Research from the British Bankers'' Association (BBA) has shown that mortgage approvals rose from 42,343 to 44,288 from the previous month, but they are still a third lower than this time last year.

Allan Monks, economist at JP Morgan said: "With credit conditions likely to continue tightening, and the growing expectation that house prices will fall this year, we would still expect to see some further declines in house purchase activity looking forward."

He added that the rise in the BBA provides some signs that "we may be close to the bottom of the current slowing in house purchase activity".

Almost half of the new lending in January was remortgaging, according to the report.

The BBA is an association for UK banking and speaks for 228 banking members from 60 countries.

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