Mortgage approvals fall to 11-month low

Mortgage approvals for house purchases slowed to an 11-month low of 31,888 in March.

This was a drop from 32,840 in February and a 25-month high of 38,233 in January, according to the British Bankers Association.

Dr Howard Archer, chief European and UK economist for London-based IHS Global Insight, said: “This indicates that underlying housing market activity remains muted.

“There was a limited boost to housing activity at the start of 2012 from first-time buyers looking to complete before the stamp duty concession ended on 24 March.

“March’s 11-month low in mortgage approvals reinforces our belief that house prices are more likely than not to drift downwards over the coming months in the face of soft economic fundamentals and low consumer confidence.

“Specifically, we expect house prices to fall by around 3 per cent by the end of 2012.”

He added: “Mortgage approvals are low compared to long-term norms. At 31,888 in March, mortgage approvals were only 56.8 per cent of the average monthly level of 56,156 seen since 1997.”

Meanwhile, the BBA reported a small increase of £141 million in unsecured consumer credit in March. This followed a net repayment of £146m in February.

They said there was increased borrowing of £247m on credit cards in March, which outweighed a net repayment of £106m in personal loans and overdrafts.