26th January 2011
As the economy shrank in December so did the number of mortgage approvals, according to British Bankers' Association figures reported here on This is Money.
Banks granted the fewest mortgages for two years in December as buyers struggled to meet tighter lending criteria.
In December 28,726 mortgages were approved with net mortgage lending for 2010 at £20bn down from £35.4bn in 2009. Net lending which strips out redemptions and repayments fell to £880m, the lowest since 1999.
The BBC also crunched the numbers suggesting that just 400,000 new mortgages were granted last year. But the question remains is past performance of the housing market any guide to the future. Will 2011 be as bleak?
House price crash has an incredibly useful table of the sentiment and predictions of housing market commentators and experts.
Here is one – IHS Global Insight's Howard Archer says: "We suspect that house prices could fall by around 10% between now and the end of 2011. Much will obviously depend on how well the economy holds up as the fiscal squeeze increasingly kicks in, mortgage availability and the amount of houses coming on to the market."
For those who are very interested in these issues, here is London broker Charcol's expert Ray Boulger's detailed report on the mortgage market in 2011 in Mortgage Introducer.
Meanwhile in the US, there was a little bit of good news. An assessment of 79 economists by Bloomberg suggested that new home purchases probably climbed for the second month in December but this was from a spectacular low. In August, the data suggested the weakest market since 1963.