Mortgage approvals fell to 70,309 in February from the January high of 76,753, which was the highest reading since November 2007. The fall brought mortgage approvals back close to the level seen in November, of 70,553 and a little below the 71,714 seen in December.
In value terms, mortgage lending was relatively strong, with the net rise in February £1.7bn, up from £1.4bn in January.
Mortgage lending rates crept higher on new business, to 3.05% on average from 3.01% in January, taking back in line with the November and December outturns, of 3.05% and 3.06% respectively.
Duncan Kreeger, director of privately funded short-term lender, West One Loans, comments:
“After a near-death experience, the British financial system is finally out of the recovery room and back on its feet. Yet most lenders are still on doctors’ orders, facing a marathon recovery.
“Mortgage lending is going from strength to strength, resuscitating dreams set back by so many years of financial turmoil. But to really get the property market moving – and to do so in a sustainable way – we need to support the businesses that matter. Small builders and entrepreneurial property developers should be as busy as mortgage advisers – but they are being starved of the investment they need.
“Mainstream lenders need to stick to a strict new regime to permanently stave off the pains of the past. But by ignoring the plight of businesses and individuals with real ambition, they are leaving a gap in the market. That’s why alternative finance is expanding so rapidly. And it’s why alternative lenders will keep taking market share as the recovery progresses.”
David Brown, commercial director of LSL Property Services, comments:
“The property market recovery has been barrelling along for many months now. The next stage will really determine whether we can not only fully make up the lost ground, but move forward into new terrain.
“As mortgage lending to households continues to pick up, transforming postponed dreams into reality, lending to the right types of businesses is critical. The durability of the wider UK economy will depend strongly on a recovery in business investment, and the same is true of the property industry.
“There’s palpable optimism among housebuilders amid strong performance reports and progress is being made when it comes to completions – with signs this will turn into a real trend over the rest of 2014. And new building is alongside substantial investment from landlords. Supported by the excellent availability of buy to let finance, the quality of our housing stock is improving too. So there are reasons to be cheerful.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
"Heavy rain and flooding in parts of the country may be to blame for mortgage approvals being at their lowest since last October and sharply down on January. Despite this, lack of supply means property prices continue to rise as would-be buyers grow in confidence with regard to their ability to get finance. There has been a slight slow down at the top of the market with overseas investors unsettled by potential tax changes but the mainstream London market is still bombing ahead."
