New mortgages at four-month low

Burnley and Pendle Citizen: There were 70,309 mortgage approvals last month, down from 76,753 in January There were 70,309 mortgage approvals last month, down from 76,753 in January

The number of mortgage approvals granted to home-buyers dropped sharply to a four-month low in February, Bank of England figures have shown.

There were 70,309 approvals last month, down from 76,753 in January. The figure was last lower, at 67,845, in October.

Analysts said the decline was likely to be temporary - and possibly caused by the wet weather - but it may ease fears that the housing market is spiralling out of control.

The figure was an 8% fall on the previous month, but still 46% up on the same month in 2013, when the number stood at 52,537.

Meanwhile, loans, including overdrafts, to non-financial businesses decreased by £750 million in February, though the pace of decline was slower than in January when it fell by nearly £900 million and December's drop of £1.7 billion.

It was the fifth successive month of decline.

But lending to small and medium-sized businesses rose by £159 million, compared to the average monthly decrease of £400 million over the past six months.

Ed Stansfield of Capital Economics said: "Although likely to be temporary, today's sharp fall in mortgage approvals should go some way towards calming fears that the housing market recovery is rapidly spiralling out of control."

He said it was hard to find an obvious trigger for the fall, given the improving economic picture, including jobs and earnings data.

"It may, therefore, be an early sign that pent-up demand released by the launch of Help to Buy and the broader economic recovery is being exhausted.

"Nevertheless, with the economic recovery likely to strengthen and the recent Help to Buy extension set to underpin demand, approvals are likely to rise further over the next few months, although perhaps at a slower rate than in the past six months."

Howard Archer of IHS Global Insight said: "It is highly likely that mortgage activity was held back in February by the very wet weather, so the slight dip in approvals does little to dilute the view that the housing market is currently sustaining robust momentum."

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