The extent to which the private rented sector is becoming increasingly under pressure has been highlighted by the latest figures on mortgage approvals.
Loans approved for home purchase last month were 29% down on a year ago, say bankers.
The British Bankers Association said mortgages approved by its members in January for home buyers were 29% lower than a year ago.
The banks approved just 28,932 loans for house purchase.
Meanwhile, latest HMRC figures show that just 54,000 homes were sold across the UK last month, unchanged from January last year.
“We are seeing little change in the borrowing environment for households or businesses at the start of 2011,” said the BBA’s statistics director, David Dooks.
On Monday, property portal Rightmove said the UK property market faced “paralysis” this year, as would-be sellers failed – or were unable – to drop their prices to realistic levels in line with sales prices achieved. Instead, sellers new to the market have raised their prices by 3.1%.
Housing expert Henry Pryor said the chances of vendors selling their home this year were less than 40%.
He warned that sellers who had raised asking prices had “completely misread the market”.
The yawning gap between asking prices and actual prices is huge: the average asking price on Rightmove is now £230,030. According to the Land Registry, the average selling price is currently £68,846 lower at £163,184.
For the whole of last year, HMRC recorded just 884,000 sales with 560,000 mortgages. Some 43% of sellers found a buyer.
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