Fewer mortgages were approved for home buyers last month than in the same month a year ago according to figures from lenders’ umbrella group UK Finance.
Banks lent on 37,567 mortgages for house purchase last month, down from 38,035 in February: purchase approvals fell do almost 21 per cent fewer than in March 2017.
This data covers major British banks but not include building societies, which account for a major element of mortgage lending for buyers.
“It is possible that mortgage approvals ... were affected by the severe weather ... even allowing for this, the underlying performance points to the housing market remaining muted” said Howard Archer, chief economic advisor at Ernst and Young’s influential economic think tank the ITEM Club.
“Never was it so important not to put too much reliance onto one month’s numbers as only a few days ago we were commenting on the positive lending data for February rather than these slightly negative approvals” says Jeremy Leaf, north London estate agent and a former RICS residential chairman.
“They reflect a rather mixed economic picture - one month up, one month down - but show a property market which is relatively uncertain as we approach the crucial spring period, which is usually the busiest time of the year” he adds.
“At the coalface, what we have been finding since March is that there are more properties coming onto the market and buyers and sellers are negotiating hard to establish what both parties consider is a figure in the new environment. Clearly any imminent increase in interest rates is not going to help an already fairly sensitive property market.”
Online agency Yopa says it’s key not to write too much into one month’s figures but Mike Scott, its chief property analyst, warns: “It may indicate lower levels of activity in the housing market in the months to come.”
He adds that some of that drop will be due to bad weather and this year’s earlier Easter weekend.
The concern follows LSL Property Services’ statement yesterday that it anticipated 2018 transaction levels to fall short of those last year following a ‘soft’ start to this year.