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latest figures from the British Bankers Association have today revealed that net mortgage lending has hit an eight-year low during April falling to £2.7bn from a previous six-month average of £3.4bn. Gross mortgage lending was also down to £7.9bn from £8.7bn the previous month.

The amount of mortgages approved for house purchase rose slightly to 27,685, compared with 26,671 in March and 23,812 in November.

Remortgage approvals dipped from 26,595 in March to 25,418, the lowest for a decade.

Personal deposits went from £700m in March to £1.8bn, making it the third month in a row where the value of deposits has risen.

David Dooks, statistics director at the BBA, says: “The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through.”

He adds: “April’s weak net mortgage lending reflects the lower number of approvals in previous months.”

Mortgage lenders have been urged to show more understanding when dealing with missed mortgage repayments during the recession, a Lothians MSP has stated.

Gavin Brown a leading Conservative MSP said more help had to be given to hard-up home owners after figures showed there were more than 800 orders for repossession last year.

He said: “The number of repossession decrees issued in Edinburgh is worrying and only likely to get worse as the recession continues.

“These statistics represent families in serious difficulty and leave homeowners across the city exposed to the real possibility of losing their home. It’s in no-one’s interests if homeowners cannot keep up with the repayments on their homes.”

The Libor rate which is used by banks and building societes as the interest rate charged when they lend money to each other has fallen to a new record low.

The Libor rate for sterling for fell to 1.30% and the Dollar LIBOR Rate reduced to just 0.66%.

These are the rates which determines the cost of mortgages and other forms of borrowing. The rate coming down may bring good news in that interest rates on mortgages and other loans may follow suit.

Gross mortgage lending in the UK fell to around £10.4bn last month, a drop of 60% from the same time in April 2008.

The figures from the Council of Mortgage Lenders shows that the lending figure is down 9% from £11.4bn in March and down 60% from £26.1bn in April last year.Lending for March and April taken together is down 57% on last year.

Michael Coogan, director-general of the CML, says: “It’s still too early to spot a clear pattern of recovery in the housing market as some commentators have suggested.

“Activity remains weak, and we have said we will see volatility in monthly lending figures as we bounce along at the bottom of the market.

“Our forecast for gross lending of £145bn in 2009 remains unchanged.”

Mortgages of 95% LTV of the property have been virtually a thing of the past as lenders responded to the global credit crisis by tightening lending criteria for home loans.

The new mortgage released is to be  called Lend a Hand and offers a competative three-year fixed rate of 4.39%. The catch being  borrowers will need their parents to deposit a sum equal to an additional 20pc of the property value into a bank savings account. This money will not be accessible until the outstanding loan falls below 90% of the property value 

The savings account will pay interest at a fixed interest rate of 3.5%. Although the bank will take a legal charge on the savings account, the parents retain ownership of their savings.

A spokesman for Lloyds TSB said “If, at the end of the deal, the combination of mortgage repayments and rising house prices has moved the mortgage from 95% to 90% of the property value, the legal charge on the savings account can be removed and the first time buyer can operate their mortgage account independently, either on Lloyds TSB’s standard variable rate, by switching products or remortgaging.”

Borrowers would save almost £100 a month by comparison with the industry’s average rate for a 90% mortgage of 5.98%, the bank added.

Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, said: “First-time buyers are essential to returning the housing market back to good health because every first-time buyer helps, on average, four other households move.

“As the UK’s largest mortgage lender we’re committed to help first-time buyers onto the housing ladder and this includes finding innovative ways to lower the first rung so that it is within reach for more people.

He added: “Market conditions mean virtually no 95pc loan to value mortgages are available at the moment, while the few that are come at a high price with stringent credit requirements.

“The legal charge on the parents’ savings account means we can offset the risk of lending at this level to offer a realistic and affordable option for first time buyers. It also gives parents a way of helping their children without actually having to write the cheque.”

David Hollingworth of London & Country Mortgages, the broker, said: “The advantage, other than rate, is that because of the additional security Lloyds will have a less rigorous credit score requirement.

“The parent will earn interest on their savings which are placed in a three-and-a-half-year fixed rate of 3.50pc. There are better three to four year fixed rates available, but it isn’t too far off the pace, particularly when considering the mortgage rate it opens up.

“Lloyds will take a charge against the savings as well as against the property, which can be released once the LTV position reduces to less than 90pc.

He added: “Other than the lower mortgage rate, which is on par with 75pc LTV deals, the other big advantage of this structure is that the parent retains the savings in their own name. While they won’t have the ability to withdraw savings until the charge is released it does mean that the cash isn’t gifted as part of a bigger deposit.

Yorkshire Bank still offered a 95% mortgage on a three-year fixed rate for first time buyers, he said, but the rate was 6.99%.

Estate agents sold more houses in April than in any month since October, 2007.

New figures from the National Association of Estate Agents show that the average estate agent sold ten properties in April, up from eight in March and a low of five in August 2008.

Chief executive of the National Association of Estate Agents, Peter Bolton King, said: “What we are beginning to see now are consistent positive indicators that have held firm or improved since the beginning of the year.

“Six months ago people were talking about how British people’s attitude to owning property had changed in the recession. The NAEA always said that this was nonsense, and that demand for property remained strong, but confidence in the market had gone.

“These figures show that this confidence is returning.”

The Alliance & Leicester are extending the range of products they  have at 85% LTV to appeal to First Time Buyers. They  are launching a new 3 year fixed rate mortgage for First Time Buyer’s only  at 5.99% LTV with £0 booking fee and a refunded valuation.

For new purchase customers they are also introducing some new market leading 3 and 4 year fixed rate products at 85% LTV with a refunded valuation.

Also for purchase customers they have added a refunded valuation to our 2 year fixed £995 fee products at 65% and 75% LTV. Remortgage customers still benefit from a refunded valuation and either £200 cashback or Mortgage Transfer Service.

The product rates are:
- at 65% LTV – 3.64%
- at 75% LTV – 3.89%

The amount of buy-to-let products available in the UK  has gone up 58% since the end of last year, the latest figures show from Mortgages for Business.

They took the information  from its Mortgage Flow sourcing tool, Mortgages for Business recorded a rise in buy-to-let products from 62 products in December to 106 deals in April.The availability of BTL products remains  very low at 20% of 2007 levels, but there are positive signs now showing.

Mike Freeman, technical support manager at Mortgages for Business, says: “With the market starting to bottom out and landlords beginning to buy up properties at low prices, lenders are beginning to feel more secure.”

He adds: “We’ve actively been talking to lenders who we have long-term relationships with and there is a feeling that we may see a positive shift in lending criteria with a particular focus on loan to value ratios.

“This is positive and shows growing confidence in the buy-to-let market.”

Ray Boulger of John Charcol  believes that the UK housing market will stabilise by the third quarter of this year and house prices will show a net fall of only 5% in 2009.

He spoke yesterday about the  MPC decision to keep rates at 0.5% “There has been more positive news on the housing market over the last month, with Nationwide’s real, i.e. non seasonally adjusted, house price index showing increases for each of the last 2 months and a net fall of only 0.8% in the first 4 months of this year. Estate agents have been reporting increased interest from both first time buyers and movers since the beginning of the year and some of that interest is now translating into sales, fuelled by a significant improvement in affordability as a result of a 20% drop in house prices and lower mortgage rates.

“The good news on the mortgage front is that over the last few weeks lenders have been increasing the availability of mortgages up to 80% and 85% LTV, but deals available up to 90% are still thin on the ground. I expect the choice of deals available up to 90% to increase over the next few months but the return of the 95% LTV mortgage is still some way off for most borrowers, although Nationwide offers mortgages up to 95% for existing customers moving home.

“Other positive news for the housing market comes from the RICS monthly survey, which is now reporting the average length of time taken to sell a property is slowly declining and that relatively little new stock is coming onto the market, despite the increased number of forced sales. Furthermore April’s Consumer Confidence Index from Nationwide recorded its largest rise for 2 years.

“These are all indications that conditions in the housing market are now improving and I expect the market to stabilise by the third quarter of this year and house prices to show a net fall of only 5% in 2009. However, house prices are unlikely to recover quickly… the prospect of increases in interest rates, plus lenders’ less generous affordability calculations, will inhibit house prices increasing too quickly.”

As expected the Bank of England kept interest rates on hold at 0.5%.

With very little movement allowed for any more  rate cuts  and with the Bank pumping money into the banking system through quantitative easing.

The process involves the Bank effectively printing money to buy government and corporate bonds.

The Bank has said it is on track to spend £75bn on quantitative easing by June as planned.

The British Chambers of Commerce has called on the Bank to use quantitative easing more effectively.

“The recession remains severe and business is concerned that the quantitative strategy has not been effective so far,” said David Kern, chief economist at the BCC.

“They must accelerate the asset purchase programme, and start implementing the second £75bn instalment. A bigger proportion of the funds should be allocated to purchasing private sector paper,” he added.

Most of the money so far has been used to buy up government bonds.

The economy shrank by 1.9% in the first quarter of 2009, but a selection of surveys have suggested that the decline in the the first 3 months could be the worst we will see.

The purchasing managers’ indexed showed the pace of the downturn in the manufacturing sector had slowed by an unexpectedly large amount in April while the service sector shrank at its slowest pace since last August.

Also, the Nationwide Building Society said UK consumer confidence saw its biggest rise in two years last month.