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Mortgage lending increase points to stabilising housing market

03 May 2005
Figures released by the Bank of England (BoE) revealing an increase in the number of loan approvals for home purchase are pointing towards a degree of stability in the housing market.

According to the BoE, the number of loan approvals for home purchase - loans agreed but not yet made - rose to a seven month high in March, reaching 91,000 from 86,000 in February.

The rise was qualified somewhat by lower than expected mortgage lending growth figures of £7 billion and 11.7 per cent - less than the anticipated £7.1 billion and 12.1 per cent - but the figures were enough for some commentators to highlight the stabilising market.

"You'd be hard pressed to say the housing market is spiralling down. If anything it may be stabilising and showing that normal spring bounce," Geoffrey Dicks, UK economist at RBS Financial Markets, told Reuters.

The mortgage lending increase certainly seems to corroborate other recent evidence of a return to stability for the housing market.

Nationwide found a 0.9 per cent increase in house prices in April last week, and Hometrack said the market appeared to be levelling out following ten months of falling house prices.

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