Mortgage lending remained subdued during April as the housing market failed to pick up momentum, figures showed today.
The number of mortgages approved for house purchase crept ahead by just 2% during the month to 49,871, according to the Bank of England.
The figure was the highest seen this year, but it was still down on the recent peak of 59,531 approvals in November, as people buying lower-value properties pushed through purchases before the end of the stamp duty holiday.
Net mortgage lending, which strips out redemptions and repayments, was also well down on the recent average.
New lending increased by just £490 million during April, up on the previous month's £168 million, but less than half the average of £1.3 billion seen during the past six months.
The figure was not entirely unexpected, as the British Bankers' Association had already reported that borrowers made strong repayments during the month, but it will add to speculation that the housing market recovery has run out of steam.
Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club, said: "The April data shows a feeble increase in net mortgage lending, particularly with the March figure revised down.
"Meanwhile the slight pick up in approvals is of little comfort as they still remain well below the six-month average."
She said the figures did not bode well for the housing market, particularly as the supply of properties coming on to the market was continuing to increase, while demand was failing to pick up.
She said: "On this basis, we expect house prices to stagnate over the course of this year, and anticipate only a gradual recovery in 2011."
Howard Archer, chief UK and European economist at IHS 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 believe that house prices are likely to be erratic over the coming months and at best will make very modest gains over the rest of the year. Indeed, we would not be surprised if they were only flat overall through the rest of 2010."Reuse content