INSTANT VIEW - March mortgage approvals at record low

LONDON (Reuters) - Mortgage approvals for house purchase fell to 64,000 in March, the lowest since the current series began in January 1999, the Bank of England said on Tuesday.

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HOWARD ARCHER, GLOBAL INSIGHT

"The low level of mortgage activity is not only a consequence of slowing demand for houses due to the elevated affordability pressures facing potential house buyers, but also increasingly due to very tight credit conditions leading to markedly fewer and more expensive mortgages being available.

"Despite the Bank of England's special liquidity scheme, there are currently few signs that credit conditions are loosening significantly. Consequently, funds for mortgage lending seem likely to remain limited for some time to come while market interest rates are still high.

"The Bank of England reported that consumer borrowing fell back to 1.2 billion in March after unexpectedly spiking up to 2.3 billion in February.

"Going forward, we expect that consumer borrowing will be limited by tightening lending conditions, while consumers are likely to be increasingly keen to rein in their borrowing.

"Furthermore, we suspect that mounting concerns over the economic outlook will cause consumers to look to save more. Consequently, an increasing propensity to save seems likely to significantly dampen consumer spending over the coming months.