According to the Bank of England’s (BoE’s) Money and Credit statistics for February, there were 70,993 mortgages approved for house purchase at a value of £16.7bn. This was a drop from 73,841 in January, but a nominal rise on the 70,647 seen in December.
The number of house approvals in February was also stable compared to the six-month average of 70,972.
Remortgages amounted to 48,210 at a value of £9.8bn, a small rise on January’s 46,451. Remortgage approvals have steadily increased since November, which had a total of 44,907 approvals, and December, which saw 45,270.
The remortgage activity recorded in February was above the six-month average of 43,518.
Gross mortgage repayments increased to £21bn from £18.5bn.
The net borrowing of mortgage debt fell from £5.9bn to £4.7bn but remained above the pre-pandemic average of £4.3bn in the 12 months to February 2020.
Lisa Martin, development director at TMA Club, said the statistics showed that the mortgage market continued to “perform strongly” with activity exceeding pre-pandemic levels.
Martin added: “However, with lenders raising their rates, mortgage product availability reducing significantly, along with continued rising living costs, borrowers will be looking for the best mortgage options available to them to keep their repayments at an affordable level.
“As demand increases, brokers will need to provide their customers with suitable and affordable products that meet their needs.”
Small rise in interest rates
The interest rate of newly drawn mortgages rose by one basis point to 1.59 per cent in February while the rate on existing mortgages increased by the same to 2.02 per cent.
Richard Pike, Phoebus Software sales and marketing director, said: “The impact of the increase in the base rate may not be dramatic in and of itself, but taken with the rising cost of living and, looking at the increase in consumer credit borrowing, it is looking like money is getting tighter all the time for many.
“For homeowners and those looking to secure a new mortgage rates are still low but, as we’ve seen in the last week, are already increasing. However, lenders need to lend and as such will not be looking to overstretch potential or existing borrowers at a time when household expenses are already being put under pressure.”
