Mortgage approvals dip for second month

Mortgage approvals fell for the second month in a row despite lenders stepping up their offers to borrowers.

A total of 66,837 mortgages were approved for house purchases in March, down 1.6% on the previous month, Bank of England figures show.

The number of loans approved for those remortgaging also fell.

Lenders are currently engaged in a price war, particularly during recent weeks when a number of new low-rate deals have been introduced.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "With HSBC launching the cheapest five-year fix on the market at 1.69% and Yorkshire Building Society introducing a record low two-year discounted rate at 0.89%, the market is more competitive than ever.

"It is a good time for borrowers, with lenders keen to attract business from first-time buyers, home movers and those remortgaging. However, affordability criteria remains tight."

Family assistance

A report earlier in the week suggested that the "Bank of Mum and Dad" is the 10th biggest UK mortgage lender as buyers increasingly rely on financial support from their parents. Parents will lend £6.5bn this year, according to insurer Legal & General.

Consumer credit - such as personal loans, credit card borrowing and overdrafts - continued to grow at the rate seen in recent months, the Bank of England figures show.

There has been an 11% rise in loans and overdrafts in the 12 months to the end of March. This growth has led to declarations of "vigilance" from the Bank of England and financial regulators.

Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline, said: "While most people will cope with this borrowing for the moment, if the economy does worsen over the coming months there is a significant risk that many who have taken on this extra commitment could start to struggle."

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