Mortgage Lending Slows Down
Mortgage lending remained subdued in April, as the housing market failed to ignite for the traditional spring selling season.
The total value of loans rose by £1.8 billion, down from a rise of £2.3 billion in March and below the six month average of £2.7 billion, according to the British Bankers' Association (BBA).
Mortgage sanction for house purchases edged up to 35,729 in April from 35,044 in March and 30,946 a year ago. However, the number was still down on the 59,849 monthly average since 1997 and remained below the 27-month high of 45,822 reached in December last year.
Howard Archer, chief economist at IHS Global Insight, said that the "muted" figures "reinforce our suspicion that house prices will struggle to make significant gains over the coming months". He added, "Although it may be starting to pick up modestly from its early-2010 lows, housing market activity is limited; the economic fundamentals (high unemployment, still falling employment, low earnings growth and looming tighter fiscal policy) are still far from robust".
The market slowed in the run-up to the general election and that price growth is beginning to show signs of dampening as more properties come on to the market.
The market slowed in the run-up to the general election and hence price growth has started to show signs of dampening as more properties come on to the market.
However, the BBA said that the decline in the growth of net lending was due to borrowers increasingly using spare cash to pay off more of their home loans.
Gross mortgage lending stood at £8.2 billion in April, down from £8.6 billion in March and lower than the previous six month average of £9.1 billion.
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