Photo: Alan Feebery
Gross mortgage borrowing in February was £9.6 billion, 17 per cent lower than in the same month last year. Despite slower demand in the second half of 2014, though, the overall mortgage stock is 1.3 per cent higher than a year ago. House purchase approvals, meanwhile, are starting to trend upwards, with approvals rising slightly compared to January.
Richard Woolhouse, Chief Economist at the BBA, said the increase is “welcome news” and “a sign that the housing market is beginning to improve”.
“We’re seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available,” he commented.
“Demand for loans and other types of personal borrowing is rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold. Personal deposits grew very slowly as alternative savings vehicles remain attractive, particularly the new pensioner bond.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), said that the 20 per cent fall year-on-year in lending was “widely anticipated, given the high levels of activity in early 2014”.
“However,” he adds, “looking at the seasonally adjusted figures, a six month high in the value of lending and a second successive rise in the number of approvals shows that there is plenty of life in the market.
“Approvals were at their highest level since September as more borrowers look to capitalise on the excellent mortgage deals available on the high street. With rates continuing to hit record lows and a rise in the base rate still some way off, lenders have a strong appetite for business and the upswing in lending suggests that consumers are keen to take advantage.”
“The figures also indicate that existing homeowners are increasingly seizing the opportunity to remortgage, with a 9 per cent monthly rise in remortgage lending compared with 1 per cent in lending for house purchases. For many owners, current conditions in the market are the best that have been seen in many years.”