Mortgage approvals for house purchases fell to a nine-month low and -21% below the recent peak in November 2009, according to Capital Economics.

Figures from the Bank of England (BoE) indicate that they dropped by -2.1% in February 2010 to 47,094 having already fallen by -17.4 in January, the third month in a row they have declined.

Ed Stansfield, Capital Economics’ chief property economist, said: ‘The figures make it harder to argue that January’s fall was partly a one-off hit from the poor weather, as that would have suggested that at least some recovery was due in February. However, it is still plausible that the weakness of the data in February is a reflection of the end of the previous stamp duty holiday at the turn of the year.’

However, despite these falls there was a +3.3% rise in buyer enquiries during March 2010, although this was only just over half the average increase (6%) seen between 2004-07, according to Hometrack. This indicates that buyer confidence is fragile and is unsurprising give the weak state of the labour market.

Stansfield said: ‘We are not convinced that the Budget stamp duty changes will rapidly revive the market. Their effectiveness will be limited by the weak outlook for the economy and the lack of mortgage credit. Moreover, experience strongly suggests that the impact of such measures tends to be heavily concentrated in the final two or three months before a lower tax rate expires or a higher tax rate comes in to force. Thus, a strong recovery in mortgage approvals seems unlikely in 2010.’