Some good news for the housing market emerged yesterday, as the British Bankers’ Association reported “exceptionally strong” demand for funds to remortgage property. That would suggest that the credit crunch may not be affecting those refixing their mortgages quite yet, contrary to some of the more gloomy predictions about their plight. The BBA said the number of remortgage approvals rose to 79,016, up 17 per cent on December and up 39 per cent year-on-year as a raft of borrowers came off two- and three-year fixed rate deals, albeit usually with a “payment shock” as they moved on to the higher rates now generally charged. Remortgaging activity hit its highest monthly share of all mortgage approvals since the BBA began collecting data in 1997, at 49 per cent.

However the BBA numbers exclude the types of lender who specialized in the UK’s “sub-prime” sector. The number of mortgages approved – that is entirely new finance flowing into the property market – was also up on December, although that was an exceptionally low figure. Some 44,288 new mortgages were approved by the major banks in January, higher than expected by analysts. A total of £18bn was advanced to consumers during the month, up from £15.5bn in December, although the figure was down 4.7 per cent on a year earlier. Nonetheless, the new mortgage approval figures remain among the lowest on record, and down 31.3 per cent on January 2007. There was little in the data to shift the expectation of a stagnant real-estate market in 2008, and the suspicion that first-time buyers are finding it difficult to obtain a mortgage.