Residential mortgage approvals increased to 63,500 in March, up from 62,700 in February and above an average of around 63,200 over the previous six months, the latest data from the Bank of England shows.
Approvals for remortgaging with a different lender also increased, from 41,200 in February to 51,300 in March.
However, the data likely captures a lending environment before mortgage rates reached their peaks, with the data showing that the average interest rate paid on new mortgages decreased from 4.10% in February to 4.03% in March.
The figures paint a picture of buyers and sellers trying to push through on deals before mortgage rates rose.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “Mortgage approvals picked up in March, demonstrating an underlying resilience to the housing market which started to make itself apparent once the Budget was in the rear-view mirror and continued as rates started to rise as a result of the Middle East conflict.
“The effective interest rate paid on new mortgages decreased to 4.03% and the rate on the outstanding stock of mortgages also fell to 3.93%. Affordability concerns remain but in recent days we have seen lenders trim their mortgage rates, which will be welcomed by borrowers.
“Remortgaging numbers jumped significantly, suggesting that borrowers coming off low rates are shopping around for the best deal possible rather than opting for the ease of sticking with their existing lender."
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “What’s particularly interesting about these latest mortgage approvals is that not only are they a good indicator of likely housing market activity over the next few months, they reflect a healthy increase at a time when we might have expected more of a pause with so many other economic distractions.
“We have seen a similar pattern in our offices - a grim determination of the need-not-want-to-moves taking their time as there is plenty to look at but generally still happy to proceed after negotiating best possible terms."
Gareth Lewis, deputy CEO of MT Finance, added: “It’s not surprising to see net mortgage approvals picking up in March as there was a rally as buyers and sellers tried to push through deals before mortgage rates rose. There was a lot of chopping and changing with lenders pulling rates at short notice as swap rates ballooned, and borrowers rushed to secure deals.
“Transaction levels remain depleted, and with interest rates on hold for now, impetus must come from elsewhere. The government should be doing more to support the housing market and encourage activity and confidence, which would have the knock-on effect of benefitting the wider economy."
