Mortgage approvals fell by eight per cent in value from a total of £4.2 million in April 2006 to £3.9 million last month, the Building Societies Association (BSA) has revealed.
The effects of the four rate rises since August 2006 have begun to feed through into lending, the BSA's director-general Adrian Coles commented.
But homeowner borrowing should remain "robust" for the rest of 2007 on the back of a "reasonably strong economic outlook", he added.
At the same time, higher interest rates seem to be having "only a limited effect encouraging extra saving", he warned.
In spite of higher interest rates for savers, the BSA's statistics showed that net receipts into societies increased by only 1.6 per cent in April compared to 12 months previously.
Customers may not be taking the opportunity to put aside their spare funds due to a "squeeze on household finances" and "higher debt servicing costs", Mr Coles remarked.
According to Mform.co.uk, one in seven people may now struggle to make repayments on existing mortgages following the May rate rise.
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