Although February's figures were 20% lower than last year, early 2015 is seeing higher demand and the overall mortgage stock is 1.3% higher than a year ago.
Gross mortgage borrowing in February was £9.6 billion, but still remains 17% lower than in the same month last year.
Remortgaging and other approvals also increased in February, albeit some 16% and 31% lower respectively than a year ago. Approvals overall were therefore slightly higher than in January, but some 20% lower than the same time a year ago.
Additionally, deposits with high street banks weakened in February, possibly due to alternative investment in the new pensioner bonds, where some £10.0 billion of sales have been reported. Annual growth in unsecured borrowing is at its highest rate since late 2008, at 4.4%.
Richard Woolhouse, Chief Economist at the BBA, said:
“The increase in mortgage approvals 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.
“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, commented:
“February’s mortgage approval figures make for encouraging reading. A fall in the value of lending year-on-year was widely anticipated, given the high levels of activity in early 2014. However, 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% monthly rise in remortgage lending compared with 1% in lending for house purchases. For many owners, current conditions in the market are the best that have been seen in many years.”
