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Banks report 25% rise in mortgage approvals

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Banks approved 25.5 per cent more loans in February than they did a year earlier, according to the British Bankers’ Association.

The six high-street banking groups approved 79,428 loans last month, up from 63,248 a year ago.

Purchase approvals were up 20 per cent year-on-year to 45,892, while remortgage approvals rose 31 per cent to 25,073 over the same period. Approvals for other purposes grew 43.9 per cent to 8,463.

Gross lending rose 33.3 per cent year-on-year to £13.2bn, although it was down 1.5 per cent on January’s figure.

BBA chief economist Richard Woolhouse says: “Mortgage borrowing remained buoyant in February. It appears that borrowers are continuing to try to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect next month.”

SPF Private Clients chief executive Mark Harris says: “The BBA figures reflect the CML data for the same period with the mortgage market relatively buoyant. We expect this situation to continue in coming months with the mortgage market continuing to tick over.

“There are potential hiccups on the horizon which may foster some uncertainty, such as the EU referendum, but for many people life will go on and it will be business as usual. The challenger banks are keen to lend, while more established lenders also wish to bring in more business, which will be reflected in cheap rates and some tweaking of criteria.

“On the buy-to-let side, lenders will need to adapt to lending to limited companies as it looks as though an increasing number of investors will go down this route. Affordability constraints will continue to be an issue for some borrowers.”

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