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Rise in UK loan approvals

Friday, June 04, 2010

Source: Catherine Deshayes

The Bank of England has today revealed a 2% rise in the number of new mortgages approved in April...

According to the Bank, mortgage approvals for the month stood at 49,871, slightly higher than the 49,008 in March.

While the figure was the highest seen this year, it is well below the 60,000 reached in November 2009 as buyers took advantage of the stamp duty holiday, which prompted a rush to buy homes towards the end of last year.

The figures from the Bank reflect the ongoing sluggish activity of the housing market in 2010.

Commenting on the figures, Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club, said: "The April data shows a feeble increase in net mortgage lending, particularly with the March figure revised down. Meanwhile the slight pick up in approvals is of little comfort as they still remain well below the six-month average."

According to many, the figures suggest the housing market will remain subdued throughout the year, particularly as the supply of properties coming on to the market is continuing to increase, while demand was falling - not a good sign for the market.

Meanwhile, Howard Archer, chief UK and European economist at IHS Global Insight, said: "The Bank of England mortgage approvals data do little to dilute the belief that the housing market is finding it difficult to regain momentum after flagging at the start of 2010."

Yesterday, the Land Registry said house prices rose by 0.2% in April compared with March, putting the average cost of a home at £165,596 in England and Wales.

According to the Registry, house prices are 8.5% higher than a year ago - the fastest rate of growth since September 2007.

Source: www.homemove.co.uk