Number of loans also rises as 拢5bn lending in April soars 56% from November low

The amount of money lent to home buyers increased from 拢4.7bn in March to 拢5bn in April, according to Bank of England figures out today.

This represents 56% a rise from the low of 拢3.2bn in November, and is 25% above the six-month average of 拢4bn.

There was also an increase in the number of loans approved for house purchase which, in the same month, rose from 40,038 to 43,201.

At the same time total net lending to individuals has increased from 拢0.7 billion in March 2009 to 拢1.3 billion in April 2009.

Simon Rubinsohn, chief economist at the Royal institution for Chartered Surveyors, said: 鈥淩ecent numbers have been far lower than would be expected even in a recession.鈥� However, he added that he estimated the volume of mortgages approved would increase to the 60,000 to 65,000 area by the end of the year.

David Brown, commercial director at LSL Property Services said: 鈥淭hese are tentative signs of improvement in the housing market but it's still in a critical condition.鈥�

CML economist Paul Samter said it was now almost inevitable that May approvals will be higher than a year ago for the first time since early 2007. He added: 鈥淗owever, activity remains at extremely low levels on any historic comparison - and weaker than at any point in the early nineties. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue, although there could be further modest rises in the coming months."

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