"January's severe weather impacted adversely on what was already a subdued picture of borrowing demand from households and businesses"
- BBA statistics director, David Dooks
The number of mortgage approvals in the U.K. fell unexpectedly last month, reflecting restrained borrowing appetite and low business confidence among investors. According to the British Banking Association (BBA), there were 1,152 less mortgages approved by the British major mortgage providers in January 2013 when compared with December. On an annual basis the number of approvals dropped by 14.4% to 32,288, down from 33,440 in the prior month. Analysts, however, expected a reading of 34,000. At the same time, the number of approvals for re-mortgaging tumbled 28% on an annual basis, while unsecured borrowing contracted as well, by 1.6% over the year. Despite some improvement seen in the property market during the last several months, activity in the U.K. housing market appears to have stalled in the recent two months, even despite the Bank of England's credit easing policy.
"January's severe weather impacted adversely on what was already a subdued picture of borrowing demand from households and businesses. 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," BBA statistics director, David Dooks said.
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