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30 March 2006
New data from the Bank of England revealed that the number of loans approved for house purchase fell to 115,000 in February, five per cent lower than January's figure.
Growth in net lending secured on dwellings was £0.8 billion lower than in January but was in line with the previous six month average.
The decline in loans approved for house purchase from 121,000 in January to 115,000 in February was contrary to analyst expectations of a rise as the housing market picks up.
However, weak housing market figures this month were not enough to undermine the picture of housing market recovery, said analysts Centre for Economics and Business Research, with the housing market largely continuing to prop up borrowing.
The Royal Institution of Chartered Surveyors (Rics) also took an optimistic view of the figures, pointing out that despite the five per cent decline in loans approved for house purchase, mortgage approvals were still 33.7 per cent higher than a year earlier and remained above the average for the 1990s of 100,000.
Rics said that the figures supported the argument that 2006 would see the first rise in housing market activity since 2002 after three consecutive years of decline, with mortgage approvals expected to hit the 1.33 million mark this year.
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