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UK banks' mortgage approvals lowest since August - BBA

Published 27/05/2014, 10:40

LONDON (Reuters) - Britain's banks last month approved the lowest number of mortgages since August last year, according to industry data that follows others signs of a slowing in lending for home purchases.

The British Bankers' Association said on Tuesday its members approved 42,173 mortgages in April, falling for a third straight month and down from 45,045 in March.

It was up 24.5 percent compared with April last year.

Meanwhile, net mortgage lending reached 1.08 billion pounds in April - its highest since August 2011 and up from 1.00 billion pounds in March.

Bank of England officials have voiced increasing concern about the strengthening of the housing market.

Tighter rules on mortgage lending have recently taken effect requiring banks to make more checks that borrowers will able to afford loan repayments when interest rates go up.

The BoE said last week that policymakers had noted falls in the central bank's measure of mortgage approvals in February and March but it was too soon to know if that was the result of the new rules.

"Our figures show that housing market is mixed," said Richard Woolhouse, chief economist BBA.

"The amount of borrowing is however still well below the levels we were seeing before the financial crisis."

The BoE has said it would adopt further controls on mortgage lending before it resorts to interest rate rises to deal with the housing market. Interest rates are expected to rise in the first half of 2015.

(Reporting by Ana Nicolaci da Costa; editing by William Schomberg)

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