Mortgage lending falls by 60 per cent in March
Lending figures from the Bank of England for new mortgages showed a huge fall of sixty per cent for March underlining the difficulties faced in the UK property market.
Net lending totalled just £374 million in March, down from £950 million in February and £1.71 billion in January. This is partly due to low levels of property purchases and also a sign that homeowners have opted to repay debt on their homes while interest rates remain low.
The figures back up the view that consumers are adopting a wait and see approach to moving home.
There was slightly more upbeat news concerning mortgage approvals with the number of mortgages approved for house purchases rising to 47,557. This figure is down on March 2010 when the number was 48,967 and well below the monthly figure of 70-80,000 that economists expect to see in a stable housing market.
Mortgage approvals have averaged 90,000 a month since 1993.
The number of re-mortgages approved fell to 32,116 from 35,567, though that is still a 23 per cent increase on the figure from March 2010.
Meanwhile, figures released today from the Land Registry reveal that the average house price in England and Wales now stands at £160,996, an annual price decrease of 2.3 per cent.
Most economists expect the housing market to continue to decline slightly through 2011 as the combined pressures of high unemployment, restrained wage increases, high debt levels and the difficulties faced by first time buyers in getting a mortgage continue to be pronounced.
Further news on mortgage approvals came today from the Building Societies Association (BSA) who revealed that mortgage approvals by mutual building societies increased by 29 per cent in March, albeit from a low level.
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