Upturn in home loan approvals

The number of mortgage approvals rose for the first time in eight months in February, boosting hopes that the housing market had stabilised after its recent downturn.

The number of mortgage approvals rose for the first time in eight months in February, boosting hopes that the housing market had stabilised after its recent downturn.

High street banks approved 47,365 loans to buy a home last month, a 42 per cent jump on January but still 35 per cent down in value terms compared with February a year ago. It was the first rise since May.

Mortgage approvals - loans agreed but not yet made - are seen as an indicator of movements in house prices a couple of months down the line.

David Dooks, at the British Bankers' Association, said: "February's figures indicate that the declining trend seen in 2004 may be bottoming out. We have seen the start of the seasonal upturn in loan approvals, so it will be important to see how strong the usual spring impetus will be in the coming months."

Lending volumes also rose, with net mortgage lending up by £4.8bn in February, compared with £4.2bn in January. It comes a few days after Hometrack, a property website, said price inflation had ended, as it reported a 17 per cent increase in property transactions last month.

George Johns, at Barclays Capital, said: "The approvals figures tie in nicely with recent data showing that housing market activity is stabilising.... It is hard to envisage a collapse in house prices."

Other analysts said there was often a seasonal rise in activity in February. Howard Archer, at Global Insight, said: "The data are still pretty subdued overall. This points to further price softness in house prices over the next few months."

Separately, there was a confused message from two reports on shopping activity over Easter. According to FootFall, the retail analysts, the number of visitors to Britain's largest shopping centres during the weekend was 9 per cent up on a year ago. But a report by SPSL said visits were up just 4.8 per cent on Monday, offsetting an almost identical fall on Easter Saturday.