According to Connells Survey and Valuation Mortgage Approvals Tracker, mortgage approvals for house purchase renewed the downward trend in February, reversing January’s slight recovery.

They fell 3.5% to 71,400 in February, down from 74,000 in January 2008, representing the weakest February since the Bank of England records began in 1993. Only June 2005 was a weaker month for homebuyers taking out mortgages, as the housing market slowed to a halt following the 2004 succession of base rate increases. Compared to February 2007, the decline in approvals was 40.5%. Mortgage approvals for house purchase have now fallen in 10 of the last 12 months.

Ross Bowen, managing director of Connells Survey and Valuation, said: “February’s fall in mortgage approvals is not as dramatic as the fourth quarter of last year, but it does reflect both reduced appetite for borrowing and a tighter supply of lending from mortgage providers. Money market rates have climbed again in recent weeks, keeping mortgage rates relatively high, despite February’s cut in base rates. Meanwhile, confidence among homebuyers is more subdued. Those with plenty of equity in their homes or large deposits have much more flexibility and can borrow more freely, but first time buyers and those with a poorer credit history are struggling to find lenders who can help them.

“We are seeing stronger demand for remortgage business than for new mortgages. Those not moving tend to have access to better deals and need not worry about the direction of house prices.”