British mortgage approvals were unexpectedly flat on the month in May, though both net mortgage lending and consumer credit grew faster than expected, Bank of England figures showed on Tuesday.
The Bank of England said mortgage approvals numbered 49,815 in May, down fractionally from 49,828 in April and well below the 51,000 economists polled by Reuters had forecast.
The mortgage approvals figures point to muted housing market activity, as they are well below levels of late last year, never mind those during the housing boom of the last decade.
"Given that we have just had a very restrictive Budget, it is difficult to see a big rebound in the key housing market metrics over the short term. However, it is not impossible to begin to see some sort of revival before the end of the year," said Philip Shaw, economist at Investec.
Despite the stagnant approvals, net mortgage lending picked up more strongly than expected, rising to 1.184 billion pounds ($1.78 billion) from 0.979 billion in April — a figure that was sharply upwardly revised from an initial estimate of 0.490 billion.
Consumer credit also rose faster than forecast to 331 million pounds in May from a net repayment of 114 million pounds in April. However, credit card lending posted its weakest reading since September 2009.
Analysts had forecast a rise in unsecured lending of 0.1 billion pounds, with mortgage lending seen up by 0.8 billion pounds.
"Despite the modest rise in consumer credit in May, the impression remains that consumer appetite for taking on new borrowing is limited while there is an ongoing desire of many consumers to reduce their debt," said Howard Archer at IHS Global Insight.
The Bank of England has said lending conditions remain constrained but there have been tentative signs that credit flows are picking up following Britain's deepest recession since at least World War Two.
The central bank has pumped 200 billion pounds of funds into the economy by purchasing government bonds with newly created money, in a bid to boost nominal demand.
However, money supply figures have given a mixed picture as to whether this policy of quantitative easing has improved conditions outside the financial sector.
The BoE's preferred gauge of money supply, M4 excluding intermediate other financial corporations rose by 9.2 percent in May on a three-month annualised basis, its fastest rise since late 2007.
However, the annual rate of growth of the headline M4 measure rose by just 2.8 percent in May, the weakest since April 1993.
