The Bank of England (BoE) warned today that the next few months are likely to see a fall in the number of mortgages being approved, as banks are preparing to balance their books. The BoE has already revealed that mortgage approvals fell to their lowest level since the previous summer in February, due partly to the tougher credit scoring criteria imposed by lenders. But it is also warning that over the short term there will be even greater shrinkage, since banks are currently complaining of a toxic cocktail of conditions such as increased wholesale funding costs, pressures on their individual balance sheets and the underlying weakness of the UK economy itself. Combined with the prognosis for UK property prices, which is that they are set to either stagnate or fall further, the BoE Credit Conditions Survey said. Capital Economics property economist Paul Diggle told the Press Association that most lenders expect the upward pressure on mortgage interest rates to be maintained and anticipate reducing the availability of mortgages in the next three months. All in all, with little or no prospect of a material loosening in credit conditions on the cards, and housing market demand likely to remain weak, the downwards pressure on house prices is set to be maintained this year, he added. There were 48,986 mortgages approved last month in the UK a fall of 9,000 compared to the 25-month high point in January 2012. The drop was explained as the result of first-time buyers dashing to beat the deadline for the end of the government’s stamp duty exemotion, which came to an end on 24 March.