Bank reveals weak lending on mortgages

Julian Harris
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SLUGGISH mortgage lending and stuttering house prices continue to haunt the UK’s housing market, a series of data releases showed yesterday.

Mortgage lending grew by just £400m in March, the Bank of England revealed – below increases of £1bn and £1.7bn in the two previous months, and an average jump of £800m over the last six months.

The number of mortgage approvals were up, the Bank reported, yet remain low in historical terms.

“While the Bank of England’s measure of mortgage approvals for new house purchase rose from 46,700 to 47,600 in March, that rise only took approvals back to the level seen in November,” noted Samuel Tombs of Capital Economics.

“And at least part of that rise probably reflects some buyers rushing to beat the new five per cent rate of stamp duty.”

House prices in the UK fell by 0.2 per cent in April, the Nationwide announced yesterday, leaving the average house worth £165,609 -- 1.3 per cent less than at the same time last year.

“The three monthly figures, a better measure of the underlying trend, showed a modest rise of 0.6 per cent,” said Nationwide’s chief economist Robert Gardner.

“Since last November house prices have increased in three months and fallen in three months.”

Tombs added: “House prices are still broadly stagnant.” The average cost of a home remains slightly lower than in October last year.

Later in the day the Land Registry announced its own figures, showing a 1.1 per cent fall in house prices in March, down 2.3 per cent on last year.

Despite separate reports of house prices holding up in London, the Land Registry showed the average price in the capital at £336,828, down a whole percentage point compared to February.

Across England and Wales the number of completed house sales rose by two per cent in January, the Land Registry announced, compared to the same time last year.

However, there was a more significant six per cent jump in the number of properties sold for over £1m to 486, from 460 in January 2010.