While mortgage approvals dipped year-on-year by 14%, figures published by the British Bankers’ Association (BBA) showed that the first quarter of 2015 saw higher demand, as overall approvals increased by 7%.
Gross mortgage borrowing also fell compared to the same time last year standing at £10.1bn in March. However, overall mortgage stock surpassed figures seen a year ago gaining traction of 1.1%.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the figures indicated the market was likely to return to a more sustainable level.
“House purchase approvals are trending upwards with higher demand seen in the first quarter of the year. While numbers are down on the same month last year for house purchases and remortgaging, that was a frenzied time for the market and we now see a more considered phase, which is also likely to be more sustainable.”
Harris said that as well as cheaper mortgages at higher LTVs providing a boost for first-time buyers, government schemes were also proving to be successful by helping those higher up the chain.
March also saw a surge in demand for unsecured loans indicating improved confidence among consumers. Net borrowing through personal loans increased notably over the last twelve months, while annual growth in high street banks’ credit card borrowing plateaued at 4% in March.
Brian Murphy, head of lending at the Mortgage Advice Bureau, said while mortgage lending was back on track, there was still more work to be done in order to tackle the UK’s shortage of new build homes.
“Speculation that the impending general election could dampen housing activity as yet appears to be unfounded and recent announcements suggest there could be further policies to help first-time buyers onto the property ladder. However, the shortage of new build homes remains a concern and could well stunt any growth in activity if housebuilding levels do not increase,” he said.