Record low interest rates couldn't prevent a decline in lending and house prices in April.
UK house prices increased by 5.5% in the year to April, but that was down from annual growth of 9.6% in March, according to new figures from the Office for National Statistics (ONS).
In London, prices grew just 4.3%, down from 11.2% in the year to March 2015, the lowest rate of growth since October 2012.
And new figures from the Council of Mortgage Lenders showed a 10% decline in monthly house purchase lending in April compared to one year earlier.
Year-on-year lending to first-time buyers also fell sharply and there was a decline in lending for home moving.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said much of April’s housing market caution was due to the impending General Election.
“Many lenders are keen to lend and have ambitious targets for the year but with borrowers unwilling to commit, they are having to slash rates even further to attract business.”
Harris expected mortgage rates to remain competitive due to a lot of capacity in the market. "Borrowers may also be buoyed by the certainty that the election has brought and with an interest rate rise still looking a way off, confidence is bound to be stronger.”
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said the drop in first-time buyer loans is partly down to tighter limits on what people can borrow compared to their income.
“The ONS figures also show that first-time buyers have been hit by higher house price inflation than home-movers, which inevitably means fewer people will be able to access the market.
“Affordability is clearly getting tougher even though mortgage rates continue to reach record lows.”
Jeremy Duncombe, director, Legal & General Mortgage Club, said demand for homes is vastly outstripping supply, pushing up property values across key areas of the UK and making homeownership a harder goal for many to achieve.
“More suitable and affordable housing is needed at both ends of the market – from first to last time buyers.
“As we go into the summer months and predict an increase in activity in the sector, it is paramount that the Government sticks to its pledge to build more homes.”