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Last Updated: Friday, 27 January 2006, 11:11 GMT
Seasonal slowdown for mortgages
A thatched cottage
Mortgage approval figures cover a variety of trends
Mortgage lending has shown its usual end of year slowdown, according to the British Bankers' Association (BBA).

In December 2005, the overall number of new mortgages approved, but not yet lent, fell to 140,866.

Although this represented a 27% drop from November, the number of new approvals was still 5% higher than in December 2004.

For last year as a whole, the number of new mortgage approved stood at 2,153,000, a drop of 11% from 2004.

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."

Mortgage approvals

Mortgage approvals are a key indicator of near-term trends in mortgage lending and the property market.

Despite the apparent drop over the last year, the BBA figures do in fact reflect what is happening in the property market at the moment.

While the number of approvals for house purchase were 28% higher than in December 2004, those purely for remortgaging - where people stay put but just change their mortgage deals - went up by only 3%.

Meanwhile, equity withdrawal loans, where people stay put but borrow more, fell by 16%.

Seasonal adjustment

The BBA also confirmed figures which it published last week.

These showed that in December, seasonally adjusted net lending for mortgages - which reflects repayments and redemptions as well as total new lending - rose by 5.4bn last month.

That was higher than in both the previous month and December 2004.

It was also the strongest monthly figure since June 2004.

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