Home loan approvals in the UK climbed in April on the back of record low interest rates, which sustained some demand for housing during the seasonal spring home-buying period.
According to the Bank of England (BoE), lenders granted 51,823 mortgages in April as compared to 51,067 approvals in March. This figure is higher than the 50,100 approvals forecasted by 20 economists in a Bloomberg survey.
However, mortgage approvals in April accounted for just 50 percent of the monthly average in the decade to 2007 prior to the financial crisis.
Meanwhile, the housing sector could remain under pressure this week due to dampened consumer confidence, attributed to the Eurozone debt crisis and rising unemployment, according to research firm Hometrack Ltd.
Howard Archer, an economist at IHS Global Insight in London, added that “mortgage approvals are very low compared to long-term norms,” and there are still “serious worries over the situation in Greece and how this could hit the UK economy may well lead to increased caution over buying a house and damp prices”.
Nevertheless, net mortgage lending rose by £1.14 billion (S$2.28 billion) in April from the previous month.
Hometrack said that while housing prices increased 0.2 percent in May, economic concerns could keep prices and demand “in check” this year.
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