Number of loans also rises as £5bn lending in April soars 56% from November low
The amount of money lent to home buyers increased from £4.7bn in March to £5bn in April, according to Bank of England figures out today.
This represents 56% a rise from the low of £3.2bn in November, and is 25% above the six-month average of £4bn.
There was also an increase in the number of loans approved for house purchase which, in the same month, rose from 40,038 to 43,201.
At the same time total net lending to individuals has increased from £0.7 billion in March 2009 to £1.3 billion in April 2009.
Simon Rubinsohn, chief economist at the Royal institution for Chartered Surveyors, said: “Recent numbers have been far lower than would be expected even in a recession.” However, he added that he estimated the volume of mortgages approved would increase to the 60,000 to 65,000 area by the end of the year.
David Brown, commercial director at LSL Property Services said: “These are tentative signs of improvement in the housing market but it's still in a critical condition.”
CML economist Paul Samter said it was now almost inevitable that May approvals will be higher than a year ago for the first time since early 2007. He added: “However, activity remains at extremely low levels on any historic comparison - and weaker than at any point in the early nineties. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue, although there could be further modest rises in the coming months."