Bank of England figures illustrate continuing decline in UK housing market

New mortgage approvals for homebuyers have hit a new low, revealed Bank of England figures.

The number of approvals for house purchases fell to 73,000 in February, 39% down on the same month a year earlier and slightly fewer than in January.

The fall continues the trend of a rapid decline in mortgage approvals for house purchase since last summer.

The number of remortgaging approvals for those moving their loan to a new lender without moving house also fell in February, to 111,000 from 118,00 in January.

There was also a 33% drop in housing equity withdrawal in the last quarter of 2007 to £7.3bn, as falling house prices made homeowners less keen to extract equity their homes to spend on other items. This type of borrowing is now at its lowest level for three years.

The level of UK mortgage lending, which has been affected by the credit crunch, is expected to continue to fall.

“The likelihood is that the level of activity in the housing market will slip further over the coming months as mortgage lenders either temporarily close their doors to new borrowers or lift interest rates," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, told the BBC.