Mortgage lending falls back in March: UK Finance

Mortgage lending fell sharply in March, with both the value of home loans and the number of approvals falling year-on-year, according to UK Finance.

Gross mortgage lending is estimated at £20.5bn for the month, 2.3 per cent lower than a year before.

Meanwhile the total mortgage approvals has fallen by 15 per cent. More worryingly the number of approvals for house purchase fell by 21 per cent when compared to a year earlier.

However, UK Finance pointed out that while March’s figures showed a significant slowdown in mortgage lending,particularly for house purchases, the quarterly figures indicate are more positive picture, with a rising trend in the number of mortgage approvals – although the total was slightly down, when compared to the same period last year.

On a month-by-month basis the number of mortgage approvals rose by 8.3 per cent, from February to March.

Former RICS chairman and estate agent Jeremy Leaf says this figure demonstrated the danger of putting too much emphasis on one month’s figures.

He says: “It was only a few days ago we were commenting on the positive lending data for February, rather than these slightly negative approvals.”

“These reflect a rather mixed economic picture, but show a property market which is relatively uncertain as we approach the crucial spring period.”

He warned that any imminent increase could create further problems for “an already sensitive property market”.

Estate agents Yopa’s chief property analysts Mike Scott adds: “UK Finance reports a downward lending trend in March in line with the downturn in house sales reported by HMRC earlier this week.”

He described the fall in the number of approvals for house purchases as particularly  concerning.

However he adds:  “Some of that drop will be due to the bad weather and earlier Easter weekend, leading some people to defer their mortgage paperwork until the following month.

“We shouldn’t read too much into a single month’s data, but it may indicate lower levels of activity in the housing market in the months to come.”

 

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