There was fresh evidence of a slowdown in the housing market today as figures revealed that mortgage approvals for new home purchases fell by a third in January compared with January 2007.

Remortgages accounted for a record 49 per cent of all mortgage approvals.

Data from the British Bankers' Association (BBA) shows that although the number of loans granted for new home purchases rose to 44,288 in January from 42,343 in December, it was still one of the lowest figures on record.

This comes as Hometrack, the property data company, said that house prices fell by 0.2 per cent in February, taking the annual increase in house prices to only 1.4 per cent.

The number of remortgage deals approved during January rose to 79,016 from 67,535 in December.

David Dooks, the BBA statistics director, said: “Higher gross mortgage lending in January largely reflected very strong remortgaging activity, as borrowers sought out the best deals available."

The net increase in mortgage lending was £5.2 billion, up from £4.9 billion in December.

Howard Archer, of Global Insight, said: "The modest rise in January mortgage approvals reported by the BBA does little to dilute the impression that housing market activity remains muted and continues to be pressurised substantially by both stretched affordability and tightening lending practices."

There were signs that consumers are tightening their belts and paying off their debts.

Consumer spending on credit cards dipped to £7.3 billion last month, down from £7.4 billion in December.

But this spending was outweighted by the repayments made during January.

Consumers paid off £7.6 billion, the same sum as in December.

Many people also repaid chunks of their overdrafts. Overdrafts outstanding fell by £0.1 billion in January, compared with a £0.4 billion rise in December.