House prices are being predicted to fall further as it has been revealed that mortgage lending is still weak.  Forecasts had called for prices to decline for several years, and the lack of mortgage lending for the last month supports this outlook.  The Bank of England reported that April’s lending numbers represented a four month low.  The fact that house prices could be falling further is un-welcomed news for homeowners that have already watched their equity levels drop.  Warnings have been issued by analysts that homeowners and landlords need to beware of the possibility of negative equity as prices continue to drop.

Mortgage lending for April declined to a low of 45,166.  This is a drop from March’s 47,145.  Still lending remained below the levels considered healthy for the market of the usual 70,000 to 80,000 approved mortgages.  Remortgages fell as well with a 10 per cent decline from March to April.  Remortgages had been in high demand and had kept mortgage figures up month to month.  The demand on remortgages were due to homeowners seeking to avoid an interest rate increase as analysts warned the Bank was drawing nearer to a rate hike.

The decline in April may not truly be a trending behavior in the housing market according to some analysts.  Instead the decline may be due to the extra holidays in the month and the Royal Wedding diverting buyers, landlords, and homeowners from doing mortgage lending business.  Some analysts see the decline as merely a result of the month’s holidays and believe that as the last two months of the quarter complete the mortgage lending will increase again.  This may be true as remortgages are likely to increase in numbers as warnings increase that the interest rate is likely to rise in the forecasted month of August.