The housing market remained in the doldrums in November, with mortgage approvals more than 40% below their level of the previous year, according to the trading body that represents Britain’s largest banks. Financial Times, The Times, Daily Telegraph, Independent, Guardian

High street banks approved 44,811 mortgages for house purchases last month, the British Bankers Association said yesterday, slightly higher than analysts expected but well below the six-month average of 57,342.

Estate agents may take some comfort from the fact that approvals steadied, rising slightly from October’s record low of 44,321. They will be hoping that December’s cut in interest rates, and the prospect of further cuts next year, will restore some confidence to the market after months of gloom.

'Although most of the news coming out of the housing market has been poor of late, the hint of stabilisation in the BBA approvals data is not entirely isolated,' said Malcolm Barr, economist at JP Morgan.

However, net mortgage lending in November was the softest in more than two years, rising by £4.3bn compared with October’s £4.8bn rise and a six-month average of £5.5bn.

The Institute of Directors business lobby yesterday said a weaker housing market would be one factor contributing to a near-halving of economic growth in 2008, from above 3% to 1.7%.

The institute forecast that persistent inflation would give the Bank of England less scope to counter the slowdown with an aggressive easing of monetary policy, although it expected rates to fall to 5% by the end of 2008.