The number of mortgages approvals last month fell from 60,045 in November to 59,023 in December which is the first fall in over 12 months. Analysts had expected December mortgage approvals to increase to 62,000 although we also saw a reduction in mortgage lending which fell from £1.551 billion in November to £1.165 billion in December. While pessimists will argue this shows the fragility of the recent improvement in the UK property market we have to remember that the turn of the year is historically a very quiet period for the property market.

It will be interesting to see how the UK property market performs in the first quarter of 2010, a period of time which has analysts split on their forecasts. There is an interesting mix of higher inflation and subdued economic activity under the surface which will prompt a number of difficult decisions for the UK government and the Bank of England to take.

The need to keep UK mortgage rates as low as possible to give the sector time to recover is overshadowed by the need to reduce credit lines to the public and business arena in order to subdue inflation. It will be interesting to see how these two elements pan out in the first quarter of 2010.

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