LONDON: Mortgage approvals have shown a 12 per cent fall in March compared to last year, the British Bankers' Association said Monday.
There were 75,098 loan approvals in March, against 85,098 approvals in March 2006, the BBA said, but added the March figure is the highest since November 2006, when the number of approvals touched 78,626, and against 54,659 of February.
Gross mortgage lending touched 18.634 billion pounds in March, up from 14.949 billion pounds in February and 5 per cent higher than the 17.673 billion pounds recorded in March 2006.
The average value of a mortgage loan rose to 150,800 pounds during the month 134,300 pounds a year ago.
David Dooks, director of statistics at BBA, said the higher levels of gross mortgage lending show that home buyers and home owners are seeking out fixed rate mortgages as protection against interest rises. But, overall mortgage demand appears to be weakening, he added.
He said, "In the last two months, net lending has risen less sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge."
Analysts said the data indicated that the widely expected quarter point increase in the interest rates in May, which will take the rates to 5.5 per cent, and the possibility of increases in the later part of the year, have started worrying home buyers.
The BBA also said personal lending -- like using credit cards, overdrafts and loans -- too remained subdued, with net credit card borrowing down by 0.1 billion pounds with personal loans and overdrafts showing slight falls.
