Mortgage lending continued to weaken during April after falling to an eight-year low in March, a Bank of |England report has said.
Total mortgage advances during March were the lowest since February 2001, and the UK's major lenders said lending fell further in April, according to the Bank's second Trends in Lending survey.
But it said much of the decline in total lending during the past 18 months had been driven by a fall in remortgaging activity as homeowners opted to stay on their lender's standard variable rate when their existing deal expired.
The finding is in line with figures reported by the Council of Mortgage Lenders, which showed a 9% drop in mortgage advances during April.
The bank said data from the Lending Panel, which is made up of the UK's six biggest lenders, showed mortgage |applications had risen over |recent months, partly due to seasonal factors, but also as a result of buyers returning to the property market.
It added that mortgage acceptance rates were broadly unchanged since the beginning of the year, although approvals for house purchases rose during April, building on increases seen in February and March.
The survey also showed that the rate at which unsecured lending is growing was the lowest since 1992 during the first quarter, while net lending to businesses remained weak, with new borrowing |facilities largely being used to refinance existing debt.
The bank said the slowdown in unsecured borrowing, such as through credit cards and loans, which began in the middle of the decade, had intensified in recent months. Acceptance rates by lenders were little changed during April and demand |remained weak.
The interest rates consumers were charged fell slightly during March.