Mortgage advances up but lending stays down

MORTGAGE advances jumped by 8 per cent during April but lending levels remained down on a year earlier, new figures have revealed.

About 40,900 loans were taken out by people moving home during last month, compared with 37,900 in March, but the total was still 2 per cent lower than in April last year, according to the Council of Mortgage Lenders.

Although advances were higher than they had been earlier in the year, they were also still running at around half the level typically seen in April before the credit crunch struck.

The group said that with recent figures from the Bank of England showing a fall in mortgage approvals for house purchase in April, there was likely to be a "lull" in lending to buyers in the next few months.

CML director-general Michael Coogan said: "The market continues on a stable footing and the increase in house purchase lending is a good sign that the stability will continue throughout 2011.

"However, the economic outlook, coupled with Bank subdued approvals data for April, suggests a muted summer for mortgage completions."

The CML figures also showed the number of people remortgaging dropped by 28 per cent during the month as the threat of an imminent rise in interest rates faded.