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Gross mortgage lending rises to £26.5bn in March – BoE

  • 04/05/2022
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Gross mortgage lending rises to £26.5bn in March – BoE
Gross lending rose to £26.5bn in March from £26bn in February, while gross repayments fell to £19.7bn down £1.3bn from February, according to the Bank of England’s March Money and Credit report.


Approvals for house purchases were little changed at 70,691, from 70,968 in February. This remains above the 12-month pre-pandemic average up to February 2020 of 66,700.

Approvals for remortgaging, which only account for remortgaging with a different lender, were at their highest since the 52,100 approvals made in February 2020. March approvals rose marginally to 48,764, remaining below the 12-month pre-pandemic average of 49,500.

The ‘effective’ (actual) interest rate on newly drawn mortgages in March increased by 14 basis points to 1.73 per cent. The rate on the outstanding stock of mortgages rose two basis points to 2.04 per cent since February.

March saw the highest spike in net lending, as continually increasing house prices drove up mortgage borrowing to £7bn, up from £4.6bn in February.

By comparison, in Q1 2019, before Covid hit, the value of gross mortgage advances was around £63.3bn.

Intermediaries are more vital than ever

Brokers and lenders have reacted with confidence in the continued high demand and competition for housing stock. The cost of living crisis, inflation, and seller’s housing market presents an opportunity and a need for intermediary advice.

John Phillips, national operations director at Just Mortgages said: “With the Chancellor warning that there may be seven more base rate rises before the end of the year, taking it to 2.5 per cent, borrowers will be looking for advice on how to achieve long-term security in household expenses.

“Anecdotal feedback from our network of brokers reveals a push towards fixing rates for longer in the hope that the financial landscape will be less turbulent in a few years.”

Steve Seal, CEO at Bluestone Mortgages said the March stats are “reassuring” given current inflationary pressures.

“Affordability concerns are, and will continue to be, a key challenge for consumers. We expect to see a growing cohort of customers locked out of the mainstream mortgage market,” he said.

Dave Harris, CEO at More 2 Life, said: “You could say that the outlook for the mortgage market is safe as houses. Alongside enduring demand, the sector is strengthened by growing remortgage activity triggered by a surge in lenders offering lower rates of interest on five and 10-year products than on two-year loans.

“In light of the current economic backdrop, we might expect an uptick in borrowers fixing for longer and exploring later life lending, particularly as borrowers can take advantage of strong house price growth through releasing equity to address inflationary pressures elsewhere.”

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