UK banks approve fewest mortgages in more than a year as new tax weighs - BBA

LONDON, May 26 (Reuters) - - The number of mortgages approved by British banks in April fell to its lowest number since March 2015, hit by the introduction of a higher tax on buy-to-let properties, industry figures showed.

British banks approved 40,104 mortgages for house purchases last month, down from 43,854 in March and 6.4 percent lower than in April 2015, the British Bankers' Association said.

"As expected, growth in mortgage lending has fallen back sharply on last month proving that March's results were just a stamp duty spike," BBA chief economic advisor Rebecca Harding said.

Britain increased the stamp duty land tax with effect from April for landlords buying properties to rent them out, as the government sought to address a shortage of homes for owner-occupiers.

Figures from the BBA and mortgage lenders showed an increase in demand after the tax was announced in November as investors sought to buy properties ahead of the new tax.

The BBA figures do not include lending by mutually owned building societies, which accounts for around a third of mortgages. The next release of the more comprehensive Bank of England lending data is due on Friday.

(Reporting by Andy Bruce, editing by David Milliken)