Mortgage lending stronger than in March

April’s mortgage lending was slightly stronger than in March and there were also high numbers of remortgaging loans approved in the month, figures from the main banks have revealed.

The British Bankers Association (BBA) said that although still 6% lower than last year, gross lending strengthened in April and largely reflected the recent strength of remortgaging activity. Net mortgage lending was slightly stronger in April.

Approvals for remortgaging were exceptionally strong in April and will lead to the main high street banks increasing their share of the market. However, approvals for house purchase continued to be well down on the same period in 2007. Approvals for equity withdrawal & other purposes continued at a relatively low level.

BBA statistics director, David Dooks, said of the latest data: “Pressures on household finances, stalling house prices and tighter lending criteria in response to lower liquidity are all constraining demand for house purchase and equity withdrawal loans, which are both well down on levels last year.”

“In contrast, there is an active remortgaging market as people switch lenders to obtain better deals. With some £18bn of new lending and nearly 150,000 loans approved in April, it is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt.”