Mortgage approvals have risen for the sixth month in a row to reach 61,300 in March, data from the Bank of England has revealed.
The data found mortgage approvals net of cancellations for house purchases rose by 800 from February to March of this year.
Consequently, March saw the highest number of net approvals since September 2022 when they reached 65,400.
More2life managing director, Ben Waugh, suggested this increase could be attributed to the growing number of homeowners who are being forced into downsizing their property in order to navigate higher mortgage payments.
Meanwhile, Savills director of research, Emily Williams, said the finding “reflects the increased stability seen in the mortgage markets so far this year, which has given more buyers confidence to commit to transactions.”
She explained: “March activity was equivalent to 95 per cent of the normal pre-pandemic market, with the average mortgage rate on new lending falling to 4.73 per cent, 17 basis points lower than the previous month.”
However, Williams cautioned the market is “sensitive to short-term fluctuations in the cost of debt and political uncertainty in the run-up to the general election”.
She added that Savills “expects the market to continue to be somewhat stop-start until the Bank of England can definitively signal the end of the battle to control inflation through a cut to the base rate”.
In contrast to mortgage approvals, net approvals for remortgaging decreased over the same period, reaching 34,200 in March.
This represented a fall from the 37,700 remortgaging approvals recorded in February.
However, mortgage lending fell over March with individuals borrowing, on net, £0.3bn of mortgage debt.
This is a fall when compared with the £1.6bn of mortgage debt that was borrowed in February.
Additionally, the annual growth rate for net mortgage lending remained slightly negative at -0.1 per cent in March.
Meanwhile, gross lending rose from £18.6bn in February to £20.1bn in March, its highest amount since February 2023.
Likewise, gross repayments increased from £16.6bn to £19.5bn over the same period.
Legal and General Mortgage Services director of distribution and mortgage club, Clare Beardmore, said: “We have definitely seen the mortgage market move up a gear in 2024, after a slightly slower 2023.
“Gross lending and product transfer activity are holding strong, and it’s also been fantastic to see first-time buyers leading the charge, with lending to this group doubling year-on-year in February compared to the same month last year.”
tom.dunstan@ft.com
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