Mortgage approvals by banks falls to lowest for three months

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The number of homeowners taking out mortgages in February fell to the lowest figure since November, according to UK banks.

The British Bankers' Association (BBA) said 42,613 loans for house purchases were approved last month, down 1,592 from January.

However, gross mortgage lending, which includes re-mortgaging, is still 4.6% higher than a year ago.

One analyst said the figures suggest the housing market will slow this year.

"The February slowdown in mortgage approvals... fuels our belief that the housing market will come under increasing pressure over the coming months," said Howard Archer, chief economist with IHS Global Insight.

Nevertheless, the figures, which do not include lending by building societies, have varied significantly from month to month.

The BBA report also said there was a 6.6% increase in the amount of consumer credit - or unsecured lending - in the year to February.

There was a rise in the amount being borrowed on credit cards, according to the BBA figures, but a fall in the overall size of overdrafts.

"Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year," said Eric Leenders, the BBA's managing director for retail banking.

"Consumers' use of credit cards and personal loans reflect last month's increased spending figures."

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