Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Business News

New home loans at three-month high


Mortgage approvals to home buyers edged up to a three-month high in April, in further signs of a housing market pick-up.

Some 53,710 approvals worth £8 billion were made for house purchase, marking the highest number seen since January, the Bank of England reported.

The report adds to a series of studies indicating that confidence is returning to the housing market and that people are finding it easier to get access to a mortgage.

Building society Nationwide reported yesterday that house prices had recorded their strongest year-on-year growth in 18 months in May.

The number of mortgages on the market has sharply increased and lenders have slashed their rates to some of their lowest ever levels since the Government launched its Funding for Lending scheme last August, which gives lenders access to cheap finance.

Other schemes, called NewBuy and Help to Buy have also been introduced specifically to give people with smaller deposits a helping hand.

The Council of Mortgage Lenders (CML) has been reporting increased first-time buyer numbers in recent months and estate agents have also said that more "serious" buyers are entering the market.

Despite the recent uplift, Howard Archer, chief European and UK economist for IHS Global Insight, said that the continued squeeze on household finances from low wage growth and high living costs will still act as a drag on housing market activity.

He said: "While a moderate rise in house prices over 2013 looks ever more probable, a strong upward move remains unlikely given a still challenging and uncertain economic environment despite the recent signs of limited improvement."

The Bank's figures also showed that credit card lending fell back to the lowest levels seen since last October, with a £102 million increase recorded in April.

Lending on personal loans and overdrafts increased by £422 million, which was the highest figure seen since the Christmas period in December.

Analysts have said that there is generally still a strong desire among consumers to pay down their debts and shore up their savings amid the uncertain economy.