Prices set to rise as buyers latch on to cheaper mortgage offers

Would-be homeowners tempted by cheaper mortgage deals clambered on to the property ladder in increasing numbers during March, Bank of England figures showed yesterday.

The 3 per cent rise in loans to 53,504 reversed two months of decline and was stronger than expected, helped by the Bank's Funding for Lending Scheme. The average rate charged on new loans was 3.43 per cent, the lowest since January last year.

Howard Archer, at IHS Global Insight, said: "Survey evidence suggests that buyer interest and market activity has picked up modestly … house prices may very well achieve a modest gain of a couple of per cent or so over 2013."

A £600m fall in business lending in March improved on February's steeper fall.

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