Mortgage figures point to double-dip
Lending to home-buyers remains well below pre-crisis levels, according to the latest data from the British Bankers' Association.
The news will add to fears that the slowdown in the housing market since the turn of the year could turn into a "double-dip", as rising unemployment and public spending cuts depress an economy that is barely recovering from the deepest slump in three-quarters of a century. Bank net lending to none financial firms is also still falling – by £3bn in March. Lending has been falling at an average pace of £1.7bn over the past six months.
Some of this is because of weak demand for credit from firms as activity contracts; but part is still due to banks scaling back and strengthening the quality of their balance sheets. The BBA said yesterday that a total of 34,905 loans were approved for house purchases last month by its members.
While that is a jump of almost one-fifth on the March figure of 29,212, it is on an abnormally low base, as the first few weeks of the year were especially depressed after the end of the stamp duty holiday on properties under £175,000. The Chancellor announced a new stamp duty concession, this time on homes worth less than £250,000, which will expire in two years' time, and should help ease pressures at that end of the market.
Nonetheless, increases in supply are being reported by real estate professionals, which should dampen price rises.
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