Mortgage approvals hit a two-year high

High street banks turned on the lending taps in January with the most mortgage approvals for more than two years, the British Bankers' Association (BBA) said yesterday.

The rise to 38,092 – the biggest since December 2009 – came as first-time buyers rushed to beat the stamp duty holiday, which ends next month. Buyers getting on the first rung of the property ladder will pay no stamp duty on purchases up to £250,000 until 24 March.

The figures echo upbeat comments from housebuilders on a sales revival since the new year, although experts warned that the rush to beat the deadline was only likely to give a temporary boost to the market.

IHS Global Insight's Howard Archer said: "Despite the recent limited pick-up, housing market activity is still low compared to long-term norms. And despite current signs of improvement, the economic fundamentals still look far from rosy for the housing market with unemployment high and likely to rise further."

Shoppers are also unwilling to add to their debts as the BBA underlined the fragile consumer confidence.