Purchase approvals continued their upward trajectory following an 8% rise between January and February.
Approvals for remortgaging to a different lender decreased from 37,700 to 34,200 in March after a 22% increase the month before.
Meanwhile, the average interest rate paid on newly drawn mortgages decreased by 17 basis points to 4.73% in March, which follows a fall of 29 basis points the previous month, according to the Bank of England’s Money and Credit statistics.
March jump in mortgage lending
It was positive news for gross mortgage lending growth too.
New mortgage lending rose from £18.6bn in February to £20.1bn in March, the highest amount since February 2023.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage approvals for new purchases rose again to their highest level as lower mortgage rates boosted borrower affordability and confidence. Our brokers have seen an increase in activity and enquiries.
“Remortgaging numbers decreased, perhaps as borrowers chose to stick with their existing lender and do a product transfer rather than go through the additional hassle of remortgaging to another lender.”
Swap rates tick up
Harris noted that although the average interest rate paid on newly drawn mortgages fell, swap rates have subsequently risen and lenders have repriced upwards.
Gareth Lewis, managing director of property lender MT Finance, said: “Even if rates do creep up a little, this shouldn’t have too negative an impact, as confidence in house prices and where we are going to be from a rate environment [perspective] is unlikely to suppress too much optimism.
“When the sun comes out, people are far more positive, so while mortgage rates are edging upwards, this is unlikely to have such a negative impact as it would have done in, say, December.
“Businesses are also borrowing, which is a good sign, as lenders are confident that their propositions are sustainable.”
