Property sales may continue to rise
The number of new mortgages approved for home buyers in the UK rose in April for the third month in a row, according to the Bank of England.
Lenders approved 43,201 new loans to home buyers, although the number of loans to people changing lenders or topping up existing loans fell again.
Approvals for home buyers are a good indicator of short-term trends and suggest sales may continue to rise.
Completed sales in March and April had jumped 35% from their February levels.
"Although it is an upward grind rather than a jump, at least it is a steady upward grind, and it's consistent with a steady recovery in housing market activity," said Philip Shaw of Investec.
Paul Broadhurst of the Building Societies Association (BSA) said: "The rate of decline in activity in the housing market may have started to slow, but overall the lending environment remains very challenging."
Figures from the financial information service Moneyfacts indicate that lenders are still rationing their funds for new borrowers, in the wake of the banking crisis.
Of the 1,623 mortgage deals currently on offer, two-thirds still require a deposit of at least 25%, with a quarter of all deals needing a down-payment from the borrower of at least 40%.
Pressure on saving
With the drying up of the wholesale financial markets, lenders have been competing hard to attract ordinary savers to fund their mortgage lending.
But the BSA said that building societies had experienced a net outflow of £811m of savers' money in April.
The BSA said this might be because people were preferring to pay off their debts rather than save.
It repeated its complaint that its members were still suffering from unfair competition from state-backed institutions such as Northern Rock and National Savings & Investments.
"Those banks that are supported by the state are able to compete unfairly for deposits, and steps need to be taken to ensure that government backing for some institutions does not distort competition for savings," it said.
One reason for the reluctance of some people to save may be the very low rates available on many savings accounts.
Bank of England figures show that returns for savers with UK banks and building societies remain at rock bottom.
The average interest rate from instant access accounts in the UK, including current accounts, stood at 0.16% at the end of April - down from 2.42% a year earlier.
The typical interest rate for a cash Individual Savings Account (ISA) at the end of April was 0.42%, lower than the 0.63% average rate a month earlier and down from 4.81% at the same time a year earlier.
According to Moneyfacts, 27.5% of all variable rate savings accounts currently pay 0.10% or less.
Although property sales have started to pick up from the trough experienced during the winter, there is conflicting evidence about whether or not house prices are also starting to revive.
The Nationwide building society's monthly survey has found that UK house prices rose in two of the past three months, leaving them just 11% lower than a year ago.
That represents a considerable slow down in the previously reported annual rate of decline.
But a month ago the Halifax, now part of the Lloyds banking group, said prices were still continuing to fall sharply.
And this week the Land Registry reported that in England and Wales, prices were still declining, though not as fast as before.
"Activity remains at extremely low levels on any historic comparison - and weaker than at any point in the early 1990s," said Paul Samter, economist at the Council of Mortgage Lenders (CML).
"Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue," he added.