Mortgage approvals at their lowest for seven months

Meanwhile, house prices climbed £1,355 in February

Weakening borrower demand and lower than expected uptake of the Funding for Lending Scheme by banks are responsible for the drop in house purchase lending, according to research by e.surv chartered surveyors.

Their figures suggest that mortgage approval totals fell by 11 per cent in February, from 54,719 in January to 49,019, the lowest level since July 2012.

It is the second successive month that house purchase lending has fallen, after five consecutive months of rises in lending between August and December last year.

“The bad weather at the beginning of the year and a fall in demand for mortgages may both be factors," said Richard Sexton, business development director of e.surv chartered surveyors. "More would-be buyers are focusing on consolidating and paying off debts and are reluctant to purchase a new home while their finances are being pillaged by high inflation and record-low savings rates."

New figures out today from LSL Property Services show house prices climbed£1,355 in February to £229,544, meaning that the average house price in England and Wales is now only 1 per cent off its previous peak in February 2008.

David Newnes, director of LSL Property Services said: "Values have climbed £8,154 in the past 12 months and the 0.6 per cent monthly increase in February is one of the biggest monthly increases seen in the past 15 months.

“Despite gradually improving mortgage availability, cash buyers are accounting for around a third of all house sales illustrating the market is still depending on them to help sustain activity, with high value property in London seen as shielded against the difficult economic conditions in Europe.”

“And despite the improvements in the mortgage market, funding conditions are still tight for lenders and they are under extreme pressure to increase the mortgage funding on offer. It is also unclear what impact the weak sterling may have on the economy over the next few months."