The number of loans approved by lenders has grown year-on-year for the first time in nine months.
Figures published today by the Bank of England show there were 114,628 loans approved in April, an 8.7 per cent increase on the 105,394 approved a year earlier. This was the first time since July 2014 that the number of loans approved was up year-on-year.
But while the number of approvals grew year-on-year in April, the amount lent actually fell 6 per cent from £18.2bn to £17bn over the period.
The number of approvals for both house purchase and remortgage lending rose year-on-year, although lending for further advances dropped.
In April, there were 68,076 loans approved for house purchase, up 7.9 per cent on the 63,055 approved 12 months earlier.
There were 35,930 remortgage approvals in April, up 15.8 per cent on the 31,007 approved a year earlier. This was the second consecutive month where remortgage approvals were up year-on-year.
The number of loans for other purposes, like further advances, fell year-on-year from 11,333 in April 2014 to 10,623 in April this year.
Intermediary Mortgage Lenders Association executive director Peter Williams believes the mortgage market “hit the accelerator” in April.
He adds: “Lenders have been forced to batten down the hatches over the last year to adapt to new regulations. With the Mortgage Credit Directive on the horizon, we are still caught in the eye of the regulatory storm – so it is reassuring to see that more people are being approved for loans than at any point since the Mortgage Market Review rules took effect. In particular, the rush of remortgaging proves that existing borrowers are still able to switch loan under the new affordability regime.
“Lenders are working hard behind the scenes to prepare the ground for the MCD and ensure the transition is as smooth as can be hoped for in practice, so there is every prospect for modest but sustained growth in the second half of this year.”