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UK mortgage approvals down a quarter in year to March-BBA
Mon, 27th Apr 2009 10:45
LONDON, April 27 (Reuters) - The number of mortgages approved for house purchase in Britain fell by a quarter year-on-year in March, the British Bankers' Association said on Monday, casting doubt on a sustained pick-up in home sales.
The number of mortgages approved slipped to 26,097 last month from 28,024 in February, and were 25.3 percent lower than the same month last year.
The total was lower than many analysts had expected. Approvals hit a record low of 17,574 in November but had recovered steadily at the start of the year.
'The banks' figures also show it would be unrealistic to expect the mortgage market to recover in a steady and consistent way in the current economic environment,' said David Dooks, BBA statistics director.
A separate survey from property data company Hometrack on Monday showed house prices in England and Wales fell by 10.1 percent in April compared with a year ago, while prices declined at their slowest monthly pace for a year,
Hometrack said the slowdown in the monthly rate of decline to 0.3 percent from 0.6 percent in March reflected an increase in optimism from estate agents driven by increased levels of market activity.
There was an even sharper drop in the number of people remortgaging, down 58 percent year-on-year, as people reverted to standard variable rates rather than moving to new fixed-rate products.
Overall, there was 3.7 billion pounds ($5.4 billion) of net mortgage lending in March, less than February's 3.9 billion on a seasonally adjusted basis.
House prices have lost a fifth of their value in little more than a year as the credit crunch forced banks to cut back on lending. Although mortgage availability has risen slightly in response to government initiatives, higher unemployment means demand is likely to remain weak.
Figures last week showed Britain's economy contracted by 1.9 percent in the first three months of 2009, casting serious doubts over government forecasts for a recovery by the end of the year.
'The relapse in the BBA mortgage data for March highlight the fact that the most likely scenario is that the pick up in housing market activity will be both gradual and prone to relapses,' said Howard Archer, chief UK economist at IHS Global Insight.
'The overall evidence is that housing market activity is still very weak by past norms.'
The BBA figures also showed lending to non-financial companies fell by around one billion pounds, largely reflecting the unwinding of takeover finance.
(Reporting by Christina Fincher and David Milliken, editing by Mike Peacock) ($1=.6857 Pound) Keywords: BRITAIN LENDING/BBA
(uk.economics@reuters.com; Tel +44 207 542 7748)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The number of mortgages approved slipped to 26,097 last month from 28,024 in February, and were 25.3 percent lower than the same month last year.
The total was lower than many analysts had expected. Approvals hit a record low of 17,574 in November but had recovered steadily at the start of the year.
'The banks' figures also show it would be unrealistic to expect the mortgage market to recover in a steady and consistent way in the current economic environment,' said David Dooks, BBA statistics director.
A separate survey from property data company Hometrack on Monday showed house prices in England and Wales fell by 10.1 percent in April compared with a year ago, while prices declined at their slowest monthly pace for a year,
Hometrack said the slowdown in the monthly rate of decline to 0.3 percent from 0.6 percent in March reflected an increase in optimism from estate agents driven by increased levels of market activity.
There was an even sharper drop in the number of people remortgaging, down 58 percent year-on-year, as people reverted to standard variable rates rather than moving to new fixed-rate products.
Overall, there was 3.7 billion pounds ($5.4 billion) of net mortgage lending in March, less than February's 3.9 billion on a seasonally adjusted basis.
House prices have lost a fifth of their value in little more than a year as the credit crunch forced banks to cut back on lending. Although mortgage availability has risen slightly in response to government initiatives, higher unemployment means demand is likely to remain weak.
Figures last week showed Britain's economy contracted by 1.9 percent in the first three months of 2009, casting serious doubts over government forecasts for a recovery by the end of the year.
'The relapse in the BBA mortgage data for March highlight the fact that the most likely scenario is that the pick up in housing market activity will be both gradual and prone to relapses,' said Howard Archer, chief UK economist at IHS Global Insight.
'The overall evidence is that housing market activity is still very weak by past norms.'
The BBA figures also showed lending to non-financial companies fell by around one billion pounds, largely reflecting the unwinding of takeover finance.
(Reporting by Christina Fincher and David Milliken, editing by Mike Peacock) ($1=.6857 Pound) Keywords: BRITAIN LENDING/BBA
(uk.economics@reuters.com; Tel +44 207 542 7748)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
