New Bank of England figures have led to concerns that the tentative housing recovery has stalled. The figures show that the number of mortgages approved did rise but at a lower rate than expected and net mortgage lending fell by 83%.
The rise in home loan lending was at just £300 million, down from £1.8 billion in February and was the lowest increase since July last year when the housing market began its recovery from the worst effects of the recession. The poor figures are partly explained by the end of the stamp duty holiday which led to many first-time buyers rushing to take advantage before the duty fell from £175,000 to £125,000. Economists also believe that the severe winter had an effect along with continuing uncertainty about the forthcoming general election.
In total mortgage approvals averaged just 47,886 during the first three months of 2010, following a total of 59,572 last November. Approvals for remortgaging rose to 27,880 opposed to a six-month average of 25,853 and approvals for other loans reached 25,484.
Howard Archer, economist at HIS Global Insight said: “The Bank of England mortgage approvals data do little to dilute the belief that the housing market is finding it difficult to regain momentum after flagging at the start of 2010. We expect house prices to be erratic over the coming months and they may very well be no better than flat over the rest of the year.”
