British mortgage approvals fell to their lowest level in nine months in February, Bank of England figures showed on Monday, in another sign that the recovery in the housing market is stalling.
The Bank of England said mortgage approvals numbered 47,094 in February, down from 48,099 in January and well below the figure of almost 60,000 reached in November when people rushed to take advantage of a temporary reduction in property purchase tax. Analysts had forecast a reading of 48,000.
"The main message is that mortgage approvals have stalled over the past few months, indicating a lull in the housing market," said Philip Shaw, economist at Investec. "It remains to be seen if the Budget moves are enough to raise transactions and engineer an upturn."
Britain's Labour government last week announced a temporary exemption in property purchase tax for first-time buyers of homes costing less than 250,000 pounds, paid for by a rise in tax on homes costing over 1 million pounds that will take effect next year.
Despite the weaker level of mortgage approvals, total lending to households posted its strongest rise since July 2008, up 2.114 billion pounds ($3.16 billion) on the month, above analyst forecasts and an increase from the 1.885 billion pound gain in January.
Nonetheless, this was still around a fifth of the typical monthly rise seen in the boom years before the credit crunch.
Within total borrowing, consumer credit rose by a greater-than-expected 528 million pounds, the strongest rise November 2008, and mortgage lending rose by 1.586 billion pounds, its biggest gain since December 2008.
The BoE's preferred gauge of money supply growth, M4 excluding intermediate other financial corporations returned to positive territory, growing by 0.3 percent on the month, though on a 3-month annualised basis it was down by 1.0 percent.
Fuelled by record-low interest rates, British house prices have recovered by about 10 percent after dropping more than 20 percent during the financial crisis.
But major mortgage lenders Halifax and Nationwide both reported monthly falls in house prices in February, raising doubts about the sustainability of any further recovery as credit remains scarce and earnings growth is weak.
