April mortgage approvals 2nd weakest on record

27/05/2008 22:10

LONDON (Reuters) - Mortgage approvals for house purchase were the second weakest on record in April and nearly 40 percent lower than at the same time last year, a survey showed on Tuesday.

The British Bankers’ Association said approvals for home loans made a feeble recovery to 38,704 last month from March’s record low of 35,546. That was well below the six-month average of nearly 42,000.

"March was the record low and April is the second lowest ever, so you cannot call that a recovery," said Michael Saunders at Citigroup.

"The housing market remains extremely weak."

Approvals for equity withdrawal and other purposes also remained weak at 33,720, down 26 percent on a year ago. Re-mortgaging activity rose, however, and was more than 20 percent up on a year ago as homeowners shopped around for lower rates.

"Pressures on household finances, stalling house prices and tighter lending criteria in response to lower liquidity are all constraining demand for house purchase and equity withdrawal loans, which are both well down on levels last year," said BBA director of statistics David Dooks.