House purchase mortgage approvals fell to a four-month low in April, numbering just 45,166 – almost exactly half the usual level. It is the lowest April figure since records began in 1993.
The fall reversed the improvement in March to 47,145 and is the lowest number of approvals since December, when they were at a 21-month low of 42,859.
Remortgaging approvals also fell in April, to 28,091 from 31,201 in March, and were lower than the monthly average of 32,534 for the previous six months.
Howard Archer, chief European and UK economist at IHS Global Insight, said: “Mortgage approvals may have been held back to a limited extent in April by the extra bank holiday for the royal wedding and by the later Easter. Even allowing for any impact from those factors, though, mortgage approvals are clearly very low compared to long-term norms.
“Mortgage approvals have actually averaged around 90,000 a month since 1993, while a level of 70,000 to 80,000 has in the past been considered consistent with stable house prices.
“On balance, we believe that house prices are likely to end up declining by some 10% overall by mid-2012 from their 2010 highs. This implies that they will fall by around 5% to 8% from current levels, depending on which house price measure you take.”
According to the Building Societies Association, mortgage approvals by building societies in terms of value came to £1.73bn in April – 14% up on April last year, but a fall of £2.15bn on March.
Adrian Coles, director general of the BSA, said: “The number of transactions and the level of mortgage lending are likely to remain low until economic growth recovers and consumer confidence returns.”