so this latest bit of news is not good for those of us hoping to get rich out of living in our houses (this comment is aimed at winding up Mark Wadsworth).
Effecitvly the rate of mortgage lending, always low at this time of year, has fallen to an eight and a half year low. Always remember with an expanding population and more houses being built every year this is quite a reduction in real terms activity.
So what does this point to falling prices? Well logically it suggests there are not too many people either wealthy enough or confident enough to want to move house. Whilst this holds up supply of houses (and oddly, boost listed housebuilders who benefit from providing the supply trickle) and provides some temprorary suport to prices; long-term it suggests the market is still too high. Last year's recovery trend is running out of steam.
The saving grace that will stop another 20% correction is the low interest rate environment combined with 3.5% CPI inflation. This means that saving is not for anyone, as I have blogged recently and so investing in housing, althought illiquid, has some appeal. That, plus a possible fall in Sterling, makes it hard to predict where house prices will end up in nominal terms this year, in real terms I expect a 10% drop.
Where is the recovery though from the recession? Business seems to be picking up to a sustained level, but as these figures show, there is no real growth, just bumping along the bottom.