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Market cheered as rise in approvals calms fears over Stamp Duty return

Robert Gardner
Robert Gardner: Figures are encouraging

The mortgage market proved resilient in April following the end of the Stamp Duty holiday in March, according to the Bank of England.

Economists had predicted that approvals would fall as a result of buyers rushing to beat the end of the Stamp Duty exemption for properties under £250,000. But there were 51,823 mortgage approvals for house purchase in April, up slightly from the 51,067 in March.

However gross mortgage lending was down £1bn from £12.5bn in March to £11.5bn in April.

Robert Gardner, chief economist at Nationwide, says the figures are encouraging.

He says: “The number of new house purchase loans approved rose slightly from the previous month, showing that the Stamp Duty holiday for first-time buyers that expired in March hasn’t dented activity as much as expected.

“The building society sector was a key driving factor, accounting for a quarter of approvals in April – well above the sector’s 16% share of total outstanding mortgages.”

But Samuel Tombs, UK economist at Capital Economics, says that on balance, April’s lending figures paint a fairly weak picture.

He says: “The number of mortgages approved for new house purchases rose, but the level of approvals is still some 3% below its level at the end of last year, and surveys suggest that new buyer interest is increasing at a fairly sluggish pace.”

Gross mortgage lending by building societies and other mutual lenders rose 23% in April 2012 compared to the same month last year.

Gross lending totalled £2.1bn this April, compared to £1.6bn in April 2011, but was down from £2.7bn in March.

Adrian Coles, director-general of the BSA, says: “Approvals were strong in April, running well above the previous six month average. This clearly indicates that mutuals will continue to be active lenders to homebuyers in coming months.”

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