Slowdown in mortgage lending adds to housing market worries
Mortgage lending by high street banks slowed last month to its weakest pace in more than three years, the industry said yesterday.
Mortgage lending by high street banks slowed last month to its weakest pace in more than three years, the industry said yesterday.
The figures, which were the latest sign of a cooling housing market, also showed that credit card borrowing has fallen.
The British Bankers' Association (BBA) said net mortgage lending rose by £4.0bn in April, significantly lower than March's £4.5bn rise and the weakest rise since February 2002.
David Dooks, the director of statistics at the BBA, said: "The weaker recent picture of mortgage demand continued in April and tied in with other reported indicators of a slower housing market."
The data follows a series of figures showing that house prices have barely risen this year and a warning from the Bank of England that a more severe consumer slowdown is the key downward risk to the economy.
Howard Archer, a UK economist at Global Insight, said: "This will reinforce speculation that consumer spending will continue to be subdued and that the Bank of England's next move will be to cut interest rates."
There was more upbeat news from the Building Societies Association which showed mortgage approvals picked up slightly in April. The Council of Mortgage Lenders (CML) said separately yesterday that the number of loans for house purchase picked up in April to 79,000 from 73,000 in March.
Michael Coogan, the director general of the CML, said: "We expect to see a continued soft landing as long as the Bank of England resists any new temptation to raise interest rates."
Meanwhile, the BBA said consumer credit - credit cards, bank loans and HP agreements - recorded its weakest rise since the end of 1999. Net lending on credit cards fell by £40m - the first drop since May 1994.
The BBA warned that the number could have been distorted by the fact that seasonal adjustment in April takes account of Easter, which fell in March this year.
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