Mortgages: First fall in net lending

The UK housing market took a blow today with figures showing net mortgage lending fell by £73m in May, the first decline since records began in 1997, as borrowers sought to pay down their loans.

The British Bankers' Association (BBA) also reported that mortgage approvals fell to a 13-month low, with the number of home loans given the go ahead over the month slipping to 30,238, down from 32,103 in April.

City analysts had expected mortgage approvals to rise to 32,800.

"The BBA data reinforce our suspicion that house prices are likely to drift lower over the second half of 2012 and fall by around 3 per cent from current levels," said Howard Archer of IHS Global Insight.

Before the financial crisis approvals averaged 56,000 a month.