The BBA’s latest High Street Banking report shows banks approved 61,361 loans last month, down from 76,938 in February 2014. By value, mortgage lending fell 16.5%, from £11.5bn to £9.6bn.
BBA figures show that gross mortgage borrowing in February was £9.6bn – 17% lower than in the same month last year.
However the BBA was keen to point out that house purchase approvals are starting to trend upwards with higher demand for mortgages than at the end of 2014.
Remortgaging and other approvals increased in February, albeit some 16% and 31% lower respectively than a year ago.
Richard Woolhouse, chief economist at the BBA, said: “The increase in mortgage approvals is welcome news and a sign that the housing market is beginning to improve. We’re seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available.
“Demand for loans and other types of personal borrowing is rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said there are clear signs of greater demand for borrowing as confidence improves and borrowers take advantage of record low mortgage rates.
“Government schemes aimed at helping first-time buyers are proving to be hugely successful, providing a boost for those further up the chain while keeping everything moving smoothly. The Help to Buy Isa announced in the Budget will further assist first-time buyers, allowing them to believe that home ownership can finally become a reality.”
