UK Mortgage Approvals Better-than-Expected in April - Bank of England

Mortgage approvals in the UK hit their highest level since January, reported the Bank of England, as the number of home loans defied analysts' expectations and a double-dip recession.

There were 51,823 mortgage approvals in April, up from 51,067 in March.

Analysts had been forecasting 50,100.

It is lower than the six-month average of 52,864, which had been given a boost by the stamp duty holiday for first time buyers that ended in March.

Mortgage lending grew by £1.139bn in value, meeting expectations.

Total lending to individuals rose by £1.4bn in April, down from the previous month's increase of £1.7bn.

Consumer credit grew by £300m, a sharp slowdown in growth from March's £700m as the deepening recession in the UK takes its toll.

There was a decline in credit card lending of £100m in April, as consumers paid off their debts.

In May the Office for National Statistics (ONS) reported that the UK economy contracted by 0.3 percent in the first quarter of the year, dragging the country back into recession after a last quarter contraction in 2011.

This was deeper than first thought, after a downwardly revised collapse in construction sector output for the first quarter, to -4.8 percent, helped pull the rest of the economy down.

"Looking ahead, we expect transaction activity in the mortgage market to be subdued," Shehan Mohamed, economist for the Centre for Economics and Business Research, said.

"UK house prices are expected to fall in the coming months as the economy grapples with a double-dip recession, stubbornly high inflation and increased costs of housing.

"Nevertheless, we expect UK house prices to be 1 percent higher by the end of the year, largely driven by the high-end equity-rich market and overseas demand in the London market."