Banks report housing market boost and predict increase in first-time buyers

Banks have reported more signs of life returning to the housing market (Getty Images)

There was a faint whiff of possible good news for homeowners in the latest mortgage statistics published on today. Mortgage approvals climbed slightly in March, suggesting government moves to bolster the property market may be beginning to be successful.

Some 31,227 home loans worth £4.8bn were approved in the month, according to the British Bankers' Association, up from a seven-month low of 30,579 in February.

The BBA said the February slump was because of a seasonal winter slowdown, but it was cautious about signalling a recovery. The bankers warned that households and firms are still generally reluctant to borrow money due to wider uncertainty about the tough economy.

In fact net mortgage borrowing in March fell 0.1 per cent over the year while approvals were down 1.2 per cent compared to March 2012.

The BBA said the Government's Funding for Lending Scheme - launched last August - has helped increased the availability of mortgages. In particular there have been more deals aimed at first-time buyers, which should get the property market moving.

BBA statistics director, David Dooks said: “The prospect of more first-time buyers entering the market during 2013 is likely to help mortgage chains.”