The number of mortgage approvals for house purchases fell for the fifth month in a row this January, says the Bank of England (BoE).

In total, there were 39,637 agreements made in January compared to 40,540 in December 2022.

The BoE says that excluding the onset of Covid-19 “and [the] period immediately thereafter”, this is the lowest number of approvals seen since January 2009, when it recorded 32,400 having taken place.

Approvals for remortgages also fell from December 2022 to January 2023, from 26,228 to 25,357. This, says the bank, is the lowest level for this metric since July 2012, when 24,400 remortgage approvals were made.

The value of house purchase approvals dipped from £9bn to £8.8bn.

Meanwhile, net mortgage lending dropped from £3.1bn at the end of last year to £2.5bn in January of this year, and from a value of £5.4bn to £5.3bn.

Loan.co.uk chief executive Paul McGerrigan says: “Mortgage approvals have decreased for the fifth consecutive month, with numbers more than halving since August, which is unsurprising against the backdrop of sharp rises in interest rates and the cost of living crisis.

“The picture is unlikely to change over the coming months. Inflation is still remains stubbornly high and, reading between the lines of Bank of England Chief Economist Huw Pill’s recent speech at Warwick University, there is still action for the Monetary Policy Committee to take in order to see rates move back to the 2% target – a hint perhaps that there could be another interest increase pending – which is sure to dampened the property market further in the immediate future.

“However, economic indicators point to a more positive outlook in the second half of 2023, and once inflation and interest rates are more stable, buyers will gain confidence and return to the market in greater numbers.”

And MT Finance director Tomer Aboody comments: “It is not surprising to see borrowing down in January, as constant bad news inevitably impacted consumer confidence. There are buyers out there but they have been fearful about committing until they see whether the prime minister’s confidence in reducing inflation will come to fruition.

“Since January, sentiment has markedly improved, which is likely to be reflected in the next two or three months of data. Mortgage rates are down slightly and if this continues, it will help persuade those who are hesitating to proceed with their purchase.”