Increased demand for borrowing, fuelled by the Help to Buy and Funding for Lending Schemes and a buoyant buy-to-let market has pushed up the overall stock of mortgages.
Throughout much of 2013 net lending contracted but the BBA’s statistics show that over the last year the stock of mortgages funded by banks has increased by 0.7%.
Mortgage approvals dipped in April compared to the previous month falling from a value of £11.1bn in March to £10.5bn but compared to April 2013 approvals have risen by 25%.
House purchase approvals took the biggest dive falling to 45,045 approvals worth £7.4bn in March to 42,173 worth in £6.9bn in April.
Remortgage approvals remained largely the same in both value and volume.
Jonathan Harris, director of mortgage broker Anderson Harris, said this is an indication that the market is not running away with itself.
He said the introduction of the Mortgage Market Review may be having an effect: while it’s still early days, with many lenders introducing the new rules weeks ahead of the official launch, its’ impact may already be starting to be felt..
But Harris said talk of interest rates rising continues with Charlie Bean, the retiring deputy governor of the Bank of England, saying at the weekend that they could rise to 3% in the next three to five years.
“While there is no need for borrowers to panic it is important to consider whether you can afford any mortgage you take on and to opt for a fixed rate if you are concerned about budgeting,” he added.
