New figures have shown that the number of mortgage approvals fell in the UK in December 2009, to the surprise of industry  insiders, as it is the first fall in these figures for more than a year. Many analysts believe that this could signal the inability of the housing market to keep up the momentum of its current recovery. The figures show that over 59,000 loans were granted to borrows by lenders in order to buy homes. This figure compares to just over 60,000 in November 2009, according the figures from the Bank of London. The Bloomberg News Survey forecast had previously predicted an increase to almost 62,000. Some have speculated that, despite the fact that house prices rose for a straight sixth month in January,  mortgage figures are a sign that housebuying may begin to wane. Analysts also cite the fact that credit is still not widely available, particularly for those seeking bad credit mortgages or other risky re-mortgages, and the concomitant terms and conditions are likely to be off-putting to many. The household sector still carries a large burden in terms of the wider economic recovery, and with projected cuts in public spending by the government, labour markets could suffer, causing obvious knock-on effects to sectors like the housing and mortgage markets. November 2008 was actually the last time we saw a drop in the number of home-loan approvals in the UK, although overall mortgage lending rose in December, to a figure of £13.5 bn, up from £12.7 bn in November, according to figures from the Bank of England.

House prices also increased in January, although analysts have cautioned that further house prices rises may well be curtailed if wage rises are not forthcoming as a result of a strengthening economy. It is feared that the rapid recovery in house prices is very much a one-trick pony with very little meat behind it. Consumer confidence, however, saw a rise in January-the first time this has happened in three months, as optimism for economic recovery grew. This may be due in part to the fact that Britain’s fourth quarter figures for 2009 saw a 0.01% rise, inching the UK out of its longest recession in history. However, M4, which measures money supply, fell by its largest ever margin of 1.1% in December 2009, underscoring problems with credit and lending and fears for continued recovery in the UK property market.