Mortgage lending edges up

Mortgage lending increased month on month by £0.5bn in April, stronger than the March rise of £0.2bn but below the six-month average of £1.3bn, according to figures published by the Bank of England today. The number of loans approved for house purchase also rose to 49,871, higher than the March figure of 49,008 but again lower than the previous six-month average of 53,098. However, approvals for remortgaging at 26,295 were lower than those in March, but in line with the previous six-month average of 26,203. Brian Murphy, head of lending at independent mortgage broker the Mortgage Advice Bureau , said: "Although house purchases are still low in historical terms, they are slowly but surely moving upwards and reflect the continuing improvement in borrowing conditions. "Lenders still have tough criteria, but there is increasingly more competition and, crucially, an appetite to lend to quality borrowers with good credit histories and acceptable deposits. The competitive rates available are flowing through into the number of people who are prepared to buy. "However, nobody can deny that the mortgage and property markets are still very delicately balanced. This month's budget and growing question marks around the base rate, specifically how long it will stay at its current level, could easily apply downward pressure on both." Howard Archer, chief UK economist for analysts IHS Global Insight , was more pessimistic: "The Bank of England mortgage approvals data do little to dilute belief that the housing market is finding it difficult to regain momentum after flagging at the start of 2010. "Still muted mortgage approvals in April reinforces our suspicion that house prices will struggle to make significant gains over the coming months. Although it may have picked up modestly from its early-2010 lows, housing market activity is limited, economic fundamentals are far from robust for the housing market, credit conditions remain pretty tight, and house price/earnings ratios have moved back up." The Bank of England figures also showed a decrease in consumer credit lending, which fell by £0.1bn in April, below the previous six-month average and the March increase of £0.1bn. Credit card lending increased by £0.2bn but other types of credit fell by £0.3bn.