British mortgage approvals rose slightly more than expected in April but net mortgage lending growth lagged, data showed today, suggesting the housing market would stay subdued in coming months.
The Bank of England said approvals edged up to 49,871 in April from 49,008 in March and the highest since December. They beat analysts' forecasts for a reading of 49,250.
Net mortgage lending rose less than expected, up £490 million in April from £168 million in March and below forecasts for a rise of £700 million.
Analysts said that, taken together, the figures suggested the housing market would at best remain stable in the coming months, and weak consumer lending threatened to limit Britain's recovery from its deepest recession since World War Two.
Today's data showed unsecured lending to consumers fell by £136 million, confounding forecasts for a rise of £300 million and the first net repayment of credit since November 2009.
"The fact that both mortgage lending and consumer credit remains so weak will be a factor constraining the recovery this year," said Hetal Mehta, economist at the Ernst & Young ITEM Club.
But other data signalled that the supply of credit to private businesses was continuing to pick up.
The BoE's preferred money supply gauge - M4 excluding intermediate other financial corporations - accelerated to a 3-month annualised rate of 6.6 per cent from 5.4 per cent in March - the highest since Q2 2008. But the monthly rate of growth in this measure slowed to 0.3 per cent in April from 1.0 per cent.
Headline M4 money supply growth was flat on the month in April, leaving the annual growth rate at 3.3 per cent - the weakest since September 1999.
Reuters