According to the British Bankers' Association on Tuesday, the number of mortgage approvals jumped in May but analysts cautioned that the rise was largely due to the timing of Easter and seasonal factors.

The associatin said that the figures are not seasonally adjusted, and few analysts believed the more comprehensive and seasonally adjusted Bank of England figures, due to be published on Thursday, would show a big rise.

George Johns of Barclays Capital added that the rise in mortgage approvals since last autumn was not longer a sure sign of rising house price inflation as the relationship between the two series has weakened in recent years. The total level of net new lending on property rose by £5.7bn in May, which is slightly higher than the £5.1bn average over recent months.

On the other hand, mortgage lending is rising strongly, mostly as a result of high house prices which force people trading-up in the market to take out larger loans than previously for the same type of property.

By M. Sese
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