New mortgage deals plummet

The British Bakers Association(BBA) look at the number of new loans to homebuyers as a guideline to predict future housing demand, and they report a drop of 31% last month compared with the exact same time period last year.

That said, the overall picture of mortgage lending in the month of January this year showed a slight increase, mainly due to the number of re-financings.

The BBA represent almost two-thirds of the UK mortgage market and say their recent figures show net lending (that is borrowing less repayments) increased by £5.2bn, compared with an increase of £4.9bn in December and in line with the pattern for the six months before that.

There was an increase in the number of loans extended due to a substantial rise in re-mortgaging- up 39% to £79bn from same point in previous year and an increase of £11.5bn since December.

House re-mortgages accounted for 49% of all approvals which supports the data produced by the BBA displaying a steady increase in re-mortgages from September last year.

New loans for equity withdrawal and other purposes have continued to fall year after year by 23.6%, but this figure is still less than the rate of declining new mortgage approvals. Roughly 39,999 of these loans were approved in January, compared with 37,867 in December.