Adam Oldfield, chief revenue officer at Phoebus, says:

“Mortgage approvals in December were unsurprisingly down, given the lack of consumer confidence in recent months.  We may also have expected to see consumer borrowing increase around Christmas, but that was not the case.  This shows that consumers were being more circumspect and were not prepared to throw caution to the wind by adding to their debt when the economic outlook remained uncertain.

“Moving forward there is of course the next MPC interest rate decision on Thursday to factor in.  The majority of economists believe that the bank will raise the base rate again, but it is by no means a foregone conclusion.  Even if the bank’s rate does go up it may not have the immediate effect on mortgage rates that consumers tend to associate with a base rate rise.  We have seen the average two and five year fixed rates falling since November as lenders battle it out for new and continuing business.  Continually changing rates and criteria, along with the increased chance of some borrowers starting to struggle as the cost of living increases, means that the right technology and resources will be vital for lenders.”