According to the British Bankers’ Association’s latest figures, mortgage approvals increased during the month of May slightly too just over 30,500.  This marginal increase is up from 29,747 in the month of April.  A year on year comparison paints a discouraging figure for those looking for improvement over the 12 month period.  May of 2010 saw a 15% higher figure of 35,765 mortgage approvals. Remortgages increased in number during the month by only a small amount over the number in April.  Historically, the number of remortgages remains far below average.

Howard Archer, chief economist with IHS Global Insight, commented on the recent data released by the BBA, saying: “Our belief that modest falls in house prices are likely over the coming months as squeezed purchasing power, tightening fiscal policy and lingering concerns that interest rates could start to rise before the end of the year weigh down on potential buyers,”

Capital Economics’ Paul Diggle, commented on the rate of recovery within the UK economy, saying: rising inflation coupled with a stagnation of overall wages is placing a “squeeze on households” and the majority who are planning to borrow will keep their eyes open for a break.

He added: “The danger that the private sector proves unable to continue offsetting job losses in the public sector is another downside risk to the outlook for demand in the housing market.”

BBA statistics director David Dooks commented on lending in general, saying: “Consumer spending was flat in May after the boost that Easter and the Royal Wedding provided in April.

“Money is still tight and people continue to pay off debt rather than save or borrow.”