BoE: Mortgage approvals continue to fall

Banks and Building Societies approved 62,918 applications in April, compared to the average of 70,132 over the previous six months.

The number of approvals for remortgaging stood at 31,703, down from an average of 34,316 over the previous six months.

Danny Waters, chief executive of the specialist broker, Enterprise Finance, said: "Mortgage approvals for house purchase in April were considerably lower than the six-month average and this is very much a result of the Mortgage Market Review.

"This weaker lending figure is likely to set the tone for the months ahead as the new regime based on tougher affordability criteria continues to bed in.

"While mortgage approvals may be down, consumer credit overall is increasing and was higher than the six-month average in April.”

"This is very much what you would expect to see alongside a recovering economy, strengthening jobs market and a much more confident consumer.”

And Waters said it was essential for people to continue to take out credit but cautioned borrowers not to rely on house price inflation as a repayment tool.

He said: "It's vital for a recovering economy that people take out credit, whether secured or unsecured, however it is equally important borrowers do not rely on the rising value of their home to eventually pay it off. We've been there before.

"The momentum in the property market seems irresistible but people should beware relying on rising prices to bail them out.

"With interest rate rises to come, there is every chance prices in some areas of the country could dip once again. In short, residential property should never be seen as a get-out clause."