February loans show slowdown

Fresh evidence of a slowing housing market emerged yesterday as the British Bankers Association reported that the number of home loans sanctioned last month was down by more than a third on a year earlier.

The association said mortgage approvals rose in February after eight months of declines, but put the increase down to a normal seasonal pattern following a lull in activity over the new year.

Mortgage approvals - loans agreed but not yet made - rose to 47,365 last month, from 33,451 in January, but were down from 72,339 in February 2004.

The association of major banking groups said February's pick-up was a sign that the slowing trend of 2004 could be bottoming out.

"We have seen the start of the seasonal upturn in loan approvals, albeit from a very low point in the case of house purchase loans, so it will be important to see how strong the usual spring impetus will be," said David Dooks, the association's director of statistics.