Lending disappoints as housing stutters

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The Independent Online

Mortgage lending in the UK "remains subdued", home loan providers warned yesterday, with the value of advances last month reaching £11.5bn, only 3 per cent more than in March 2009.

The data, the first of a slew of crucial economic statistics to be announced this week, provides further evidence that the pace of recovery remains slow in the UK.

"Overall, housing and mortgage activity remains subdued, but is comfortably higher than in the depths of recession," said Paul Samter, an economist at the Council of Mortgage Lenders. "The longer term problems facing the market remain and will limit the speed of recovery in the housing market and the wider economy."

March's figures mean mortgage lending during the first quarter of this year was actually 9 per cent lower than in the same period of 2009, with economists warning that pressures on bank lending would persist as official support for the banks is withdrawn.

Total lending during the first quarter was £29.5bn, the lowest figure since the first three months of 2000, and 24 per cent down on last year.

The mediocre lending data is likely to concern the Government, with Gordon Brown continuing to focus on the economy as the core issue in the election campaign. Yesterday's mortgage figures will be followed by key announcements on inflation, unemployment and borrowing this week, before Friday's most crucial release: economic growth figures for the first quarter of the year.