British Bankers’ Association’s, statistics director, David Dooks said: “Low consumer confidence is depressing demand for new borrowing and consumers are continuing to save, with deposits rising by 5.5% over the year to April.”
However, he added: “New household borrowing totalled over £16bn in April. This monthly level has been fairly constant recently and with various Government schemes, including the recent extension to Funding for Lending, banks are offering competitive rates and products.”
The volumes of mortgage approvals for house purchase and remortgaging continued to edge up in April, which the BBA said would be driven on by government schemes. The average house purchase approval rose to £155,900.
Approvals in April for other loans were some 37% lower than in April 2012, no doubt reflecting lower levels of equity available and a reluctance amongst homeowners to take on extra borrowing, it said.
Adrian Anderson, director of mortgage broker Anderson Harris, said: “The numbers demonstrate that we remain some way off a sustained recovery in the housing market as caution continues to prevail. However, mortgage brokers and estate agents report the highest level of enquiries seen since the downturn so we expect this to continue to feed through to improved official figures in coming months.”
Simon Crone, Vice-President Commercial – Mortgage Insurance Europe at Genworth, said: “Until banks address the real problems facing first-time buyers – namely the ongoing dearth of products available at higher loan to values – then volumes will remain modest and thousands will remain in ownership limbo.”
Meanwhile, figures out today from LMS show the remortgage market has shown its second month of growth with activity up 17% in April to reach £3.4bn.