BBA: Mortgage approvals down 14pc
However the BBA said that it expects a reported increase in the number of first-time buyers to help mortgage chains in due course.
The BBA’s report has also shown that gross mortgage borrowing reached £7.7bn in January whilst repayment of capital reached £8.2bn.
David Brown, commercial director of LSL Property Services, said: “Lending remains above the average of the last six months despite the arctic weather but we are also seeing a cautious approach to mortgage debt taken by many current borrowers.
“Alongside suppressing the number of repossessions taking place currently, a solid labour market and rock-bottom interest rates are also giving mortgage holders the chance to get their financial houses in order by paying down debt – and many are grabbing the opportunity with both hands.”
Brown said that he believed that with monthly mortgage payments at historic lows thousands of borrowers are overpaying their mortgage while they can ahead of higher mortgage payments when rates do eventually rise.
Brown added: “Not only will this have the impact of softening the financial blow when the base rate does rise but these borrowers will have built more equity and will be able to take advantage of better rates at lower LTVs when they do remortgage.”