According to the British Bankers Association (BBA), the number of people taking out a mortgage fell in April.

Around 169,784 people took out a home loan or remortgaged during April, which is a 200,000 decrease from March, and a rise of just 1% from the previous year.

Around 65,000 people took out a loan for a house purchase in April, representing a fall of around 10,000 from the previous month, statistics showed.

The figures indicated that homebuyer demand could be moderating in the face of rising interest rates, the BBA said. Gross mortgage lending for the month was recorded at £17.3bn, which is a hike of 12% on April 2006.

This largely reflects a 10% annual growth in house prices and strong remortgaging activity, the BBA said.

Howard Archer, chief UK and European economist at Global Insight, said: “The BBA mortgage data add to the recent evidence that housing market activity is coming off the boil as higher interest rates, elevated house prices and modest real disposable income growth increasingly squeeze new buyers out of the market and make it more difficult for existing house owners to trade up.