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Mortgage approvals halve in January

CML reports 49 per cent fall from December

The Council of Mortgage Lenders (CML) has reported that 32,000 mortgages were approved in January. This compares to 62,800 agreed in December.

Numbers of first-time buyers entering the mortgage market in January also fell by 54 per cent.

The CML has said that the figures, which were in line with its earlier predictions, reflect the end of the stamp duty holiday at the close of 2009.

Michael Coogan, director general of the CML, said: "When December and January data are taken together they show little change in underlying market conditions compared with recent months, with activity still slow". However, he pointed out that the figures are "well up on the lows of a year earlier". In January 2009, only 23,000 loans were approved.

Coogan said that he anticipated lending to "remain weak" over the coming months, pointing to uncertain over the economy and the forthcoming general election. It has also been speculated that the fall in buyers will lead to a slump in house prices, as supply outstrips demand.