U.K. Banks Approved More Loans in April on Month, BBA Says
Written on May 27, 2009
U.K. banks granted more mortgages in April than a month earlier, a sign the market for home loans is stabilizing, the British Bankers Association said.
Banks approved 27,685 loans for house purchase, the London- based BBA, which represents the U.K.’s biggest banks, said today in a statement. That compares with 26,671 loans in March.
The report “adds to the overall evidence that housing market activity has very likely passed its worst point,” said Howard Archer, chief European economist at IHS Global Insight in London. “The pick up in housing market activity will be gradual and fitful for some time to come.”
The recession, forecast by Gordon Brown’s government to be Britain’s worst since World War II, may be easing. Retail sales rose for a second month in April, while an index of services industries jumped the most since 1999, reports showed this month. Rising unemployment may still dim the housing market’s prospects for recovery.
“The house purchase part of the mortgage market appears to have stabilized, with slightly more approvals coming through, although April’s weak net mortgage lending reflects the lower number of approvals in previous months,” David Dooks, director of statistics at the BBA, said in the statement cash loans.
U.K. house prices may fall as much as 14 percent this year as unemployment increases, Jones Lang LaSalle Inc. said today. Nationwide Building Society, Britain’s biggest customer-owned lender, said today fiscal full-year earnings fell 69 percent because of a rise in impairment charges and low interest rates.
The risk of default on credit lines has risen and banks are “inevitably” going to be cautious because of the high levels of credit they extended relative to their capital base, Bank of England Deputy Governor Charles Bean said in an interview with the Sheffield-based Star newspaper published yesterday.
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