Mortgage approvals begin to cool

Plummeting mortgage approvals in March indicate that higher interest rates are beginning to cool the housing market.

Figures released by the Bank of England show 113,000 mortgages were taken out by home buyers during the month, down from 118,000 in February.

The total figure dipped below the recent six-month average and represents the lowest figure since April 2006.

Approved home loans for all purposes, including remortgaging, were also down, with 288,000 approved in March compared with 308,000 a month earlier.

In the face of weakening demand, net lending to individuals fell month-on-month, the Bank of England said.

Vicky Redwood, UK economist at Capital Economics, said: "We have been waiting for a while to see high interest rates affect mortgage demand and this is the first tentative sign of it doing so.

She added: "We expect further falls in the coming months."

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