Mortgage lending up in April

Tuesday, 02 June 2009 12:00

The Bank of England has reported a rise in mortgage lending in April but experts warn a real housing market recovery could still be some time off.

According to figures from the central bank, 43,201 loans were approved for house purchase in April, up from 40,038 in March.

The figure compares with a low point of just 27,500 in November, an increase of 57 per cent.

Data released from the Building Societies Association also showed an upturn in mortgage approvals from building societies, which were 14 per cent higher in April than in March.

Estate agents are also reporting a rise in buyer interest, while Hometrack reported a rise in sales for May.

However, experts are warning any recovery for the housing market is likely to be slow.

"Sharply higher and rising unemployment, very low wage growth and an unwillingness of many people to commit to buying a house when they are still very worried about the outlook are all factors that are likely to continue to weigh down on the housing market for some time to come," said economist Howard Archer of IHS Global Insight.

Simon Rubinsohn, chief economist for the Royal Institute of Chartered Surveyors (Rics), added: "Recent numbers have been far lower than would typically be expected even in the midst of a recession, and it is still unclear how rising unemployment levels will affect any recovery.

Despite the difficulties, new buyers are still coming into the market and mortgage approvals will continue to rise slowly this year, Mr Rubinsohn added.

"We continue to expect the volume of mortgages approved to increase to the 60,000 to 65,000 area by the end of the year despite the continuing obstacles to first-time buyers accessing the market," he said.

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