Gross mortgage borrowing of £11.5bn was 47% higher than in the same month last year and at the highest level since August 2008.
Higher capital repayment (in part reflecting homeowners switching lenders) contributed, to monthly contractions in net borrowing through much of 2013, but since the turn of the year, the overall mortgage stock has started to rise as greater demand feeds through.
Mortgage assistance schemes are helping first-time buyers and housing chains generally, as housing market activity rises - house purchase approvals were up 53% in February 2014, and approvals for remortgage up 32%.
The number of mortgage approvals was 81,047 in February, compared to 78,424 in January.
Borrowing demand from businesses is improving, with manufacturers, wholesale & retail sectors having expanded their borrowing from a year ago.
BBA Chief Economist Richard Woolhouse said:
“These encouraging figures show that the demand for finance is broadening out across both the consumer and commercial markets, with mortgage approvals and lending to many types of business on the up.
“Mortgage lending has leapt 50 per cent since this time last year, whilst we are now beginning to see growth in net lending to manufacturers and retailers.
“This shows that the banks are helping businesses who are looking to invest as well as ordinary homebuyers as part of their sustained support for recovery across the economy.”
Jonathan Harris, director of mortgage broker Anderson Harris, says:
"With new mortgage lending and approvals up 50 per cent on a year ago to the highest level since August 2008, demand for borrowing continues to soar. While borrowers tended to overpay throughout 2013 and reduce their mortgages, since the beginning of this year the amount of net borrowing has risen, demonstrating increased demand.
2Government initiatives such as Help to Buy continue to boost the market and even though Funding for Lending is no longer focused on individuals, the market goes from strength to strength. Fixed-rate mortgages are by far and away the most popular form of borrowing as borrowers realise interest rates won't stay low for ever, and rush to take advantage of some of the cheap fixed rates.
"Remortgaging is popular as those on cheap standard variable rates are finally taking the plunge and locking into a low fixed-rate mortgage. We expect this trend to continue as borrowers worry about rising interest rates.
"Rising property prices are a concern for buyers, particularly first-timers who have saved hard for a modest deposit and are worried about being priced out further. The lack of stock is the main issue and while the Budget emphasised the need to build more homes, they simply can't be built quickly enough.
"With the Mortgage Market Review being introduced in little over a month's time, there are concerns that mortgage processing will slow down. However, many lenders are already MMR compliant so the transition should be relatively painless."
