There was an element of good news in the housing market from the British Bankers Association who reported that net mortgage lending increased between January and February.

The BBA reported 28,179 mortgages approved for house purchases in February, up from 24,278 in January, however, on a year over year comparison, that figure is 31% lower.

Remortgaging approvals declined slightly as borrowers reverted to standard variable rates rather than moving to new fixed rate products. Loans for equity withdrawal and other purposes were some 42% lower than at February 2008.

The annual growth rate for net mortgage lending moved into single digits for the first time since September 2001. Gross mortgage lending, at £9.2bn, was its lowest since June 2001. February’s approval activity, both in volume and value, was marginally above January, but continues to be at a very low level.

BBA statistics director, David Dooks, said of the latest data: “Most new mortgage lending is being done by the high street banks but demand is, of course, being moderated by the impacts of the recession. Remortgaging activity has slowed in recent months, while higher numbers of loans approved for house purchase simply reflect the banks’ greater market share. In the wider consumer market, unsecured credit is very subdued and individuals’ deposits are also weak, as people respond to the current interest rate climate.”