Mortgage approvals drop despite more lending.
The number of new mortgages approved fell sharply during December as the market experienced its traditional seasonal slowdown, latest figures show.
A total of 140,866 loans were approved during the month, 27% less than during November, although the number was 5% higher than in December last year, according to the British Bankers' Association.
But despite the slowdown in approvals, mortgage advances remained strong for the time of year, with a total of pounds 16.9bn lent during the month - the highest figure for December on record.
Once redemptions and repayments were stripped out, outstanding mortgage debt rose by pounds 5.4bn, higher than November's figure of pounds 5.2bn and well up on the recent average of pounds 4.6bn a month.
As a result of the stronger lending towards the end of the year, total advances for 2005 reached pounds 185.3bn, down slightly on the previous year's figure of pounds 188.4bn.
David Dooks, BBA director of statistics, said, 'Weaker mortgage lending in the first half of 2005 led to annual totals generally weaker than in 2004, but gross lending and loans approved for house purchase finished the year on an upward trend, after allowing for seasonal factors.
'The equity withdrawal market has weakened noticeably, with fewer loans approved in December than in any month since April 2000.'
Approvals for all types of home loan were weaker than they had been during November, although new mortgages for people moving home and remortgaging were stronger than they had been in December last year.
At the same time, the average value of mortgages approved for people buying a new property reached a new high of pounds 134,400.
Consumers spent a total of pounds 7.74bn on their credit cards in December, but after repayments were taken into account outstanding debt rose by only pounds 237m, up on November's figure of pounds 165m, but below October's total.
Borrowing through overdrafts and unsecured loans continued to be subdued, with new lending rising by just pounds 33m, less than half November's rise of pounds 79m, and well down on October's figure of pounds 418m.