Mortgage lending slumps to a nine-year low

Mortgage lending rose at its slowest rate for nine years during April as housing market activity remained subdued, figures showed today.

Net lending, which strips out redemptions and repayments, was just £1.83 billion during April, the lowest level since February 2001, according to the British Bankers' Association.

The low figure did not come as a surprise as mortgage approvals have been depressed since the turn of the year due to a combination of the end of the stamp duty holiday, the severe winter weather and the uncertainty created by the general election, all of which have limited activity in the housing market.

The BBA said mortgage repayments were also particularly strong during April, as banks actively encouraged borrowers to use their spare cash to pay down their loan.

But economists have speculated that the drop in lending seen this year may be down to more than these one-off factors, and could indicate that the housing market recovery has run out of steam.

Mortgage approvals for house purchase remained low during April at 35,729, up marginally on the previous month's figure, but well down on the 45,822 seen in December.

At 21,580 the number of people remortgaging was only slightly ahead of October's 10-year low, as many homeowners continued to be better off sitting on their lenders' standard variable rate, rather than switching to a new deal.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The ongoing muted BBA mortgage approvals data reinforce our suspicion that house prices will struggle to make significant gains over the coming months.

"Although it may be starting to pick up modestly from its early-2010 lows, housing market activity is limited, the economic fundamentals are still far from robust for the housing market, credit conditions remain tight, and house price/earnings ratios have moved back up.

"Very significantly, more properties are coming on to the market thereby moving the supply/demand balance more in favour of buyers."

Unsecured lending also remained subdued during the month, with people repaying £338 million more than they borrowed.

Within the total, credit card lending edged up by £169 million once interest and charges were included, despite consumers continuing to repay more than they spent during the month.

Demand for personal loans was 18% lower than it had been a year earlier, with borrowing through loans and overdrafts contracting for the 12th consecutive month, as repayments outstripped advances by £507 million.

But savings levels were subdued, with consumers increasing their deposit levels by just £399 million, down from £5.35 billion in March, despite the end of the ISA season coming during April.

David Dooks, BBA director of statistics, said: "Households' priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings.

"Uncertainties about the impact of Government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision-making."

Property
pets
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Sport
football
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
News
news
News
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
news
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living