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Bank holidays hit mortgage lending with 14% slump in April

Mortgage lending dived by 14% during April as the two bank holiday weekends hit activity in the housing market.

A total of £9.8bn was advanced during the month, down from £11.4bn in March, but in line with the subdued levels seen during the first two months of the year, according to the Council of Mortgage Lenders.

The group said it had expected a slight seasonal decline because Easter fell in April this year, adding that the extra bank holiday at the end of the month made it difficult to gauge if the fall was part of an underlying trend.

Bob Pannell, chief economist at the CML, said: "Statistical noise, associated with extended holidays around Easter and the royal wedding, makes it harder to read the immediate market situation.

"Levels of activity look set to remain broadly flat over the near-term. It now seems unlikely that interest rates will rise much, if at all, this year and this should help keep the market on an even keel."

But he added that the number of people remortgaging was likely to fall, as a rise in interest rates seems further off than thought.

The group had predicted that net lending, which strips out redemptions and repayments, would be £6bn this year, down from £8bn in 2010 and the lowest figure on record, while total advances will be broadly unchanged at £135bn.

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