Mortgage approvals suggest house prices are bottoming out

There was fresh evidence that the housing slowdown is "bottoming out" yesterday, when new figures showed the number of mortgage approvals edged higher in April.

There was fresh evidence that the housing slowdown is "bottoming out" yesterday, when new figures showed the number of mortgage approvals edged higher in April.

The British Bankers' Association (BBA) said the number of approvals last month rose 2 per cent on March to 191,857.

Although this failed to compensate for the weakest month for mortgage lending by high street banks in more than three years, the BBA said it suggested that lending figures may strengthen in the coming months. David Dooks, the BBA's director of statistics, said: "We may see some support for lending and be heading for the soft landing [in the housing market] that people talked about. There has been reducing demand but the spring upturn means that the decline in activity is starting to bottom out."He added: "Although not near the levels of last year, they indicated sufficient activity to support mortgage lending in the near-term." The number of approvals was down 17 per cent on the previous April.

Mervyn King, the Governor of the Bank of England, said recently that the housing market "seems to have stabilised" with "broadly flat" prices.

Although the runaway growth in house prices has tapered off recently, separate research today shows that the number of properties worth more than £1m sold in Britain soared by 36 per cent last year.

London led the way, with a 38 per cent increase in £1m-plus houses sold, the Halifax said. One in three of all £1m-plus property sales in the country last year was in the London borough of Kensington & Chelsea and the City of Westminster.

Martin Ellis, Halifax's chief economist, said: "While London leads the way, expensive properties are becoming a more common feature elsewhere in the UK too. There were sales of at least one million-pound property in 244 local authority districts across the UK last year."

The BBA's figures also showed that credit card borrowing has fallen. A total of £7bn was borrowed on credit cards in April ­ well down on the average of the previous six months. The £40m fall in net lending on credit cards compared with recent growth of £205m a month.