Gross mortgage borrowing hit £17.1bn in March, according to the British Bankers Association, 64 per cent more than a year ago and the highest borrowing since April 2008.
The BBA’s latest statistical analysis put this growth down to a reported sharp increase in purchase of buy-to-let and second homes, with people rushing to complete transactions ahead of the increase in stamp duty on 1 April, according to chief economic adviser Rebecca Harding.
The number of mortgage approvals in March was 20 per cent more than a year ago, with remortgaging up 25 per cent and house purchase up 14 per cent.
Adrian Anderson, director of mortgage broker Anderson Harris, said aside from the stamp duty rush, borrowers on the whole exude confidence, as household finances are relatively strong, interest rates seem unlikely to increase anytime soon and lenders have plenty of money to lend.
He said: “Remortgaging is also on the up as borrowers realise that while (the) base rate is unlikely to rise soon, mortgage rates are just so cheap that they are too good to miss.”
However, he cautioned that the flood of buyers in March will not necessarily be replaced in the short term, “while for many borrowers, tougher affordability criteria is still a barrier to getting a mortgage or remortgaging”.
Mark Harris, chief executive of mortgage broker SPF Private Clients, added there are potential hiccups on the horizon that may foster some uncertainty, such as the European Union referendum.
He said: “The challenger banks are keen to lend with lenders such as HSBC and Tesco Bank using brokers for the first time, while more established lenders also wish to bring in more business, which will be reflected in cheap rates and some tweaking of criteria.”
There were 14 per cent more approvals for house purchase in March than in the same month of 2015.
Remortgaging approvals increased in March and were a quarter higher than last March, while other approvals were 39 per cent higher than a year ago. Approvals overall were 20 per cent higher than at the same time a year earlier.
The BBA figures also confirmed a year-on-year slump in Isa deposits, with net inflow of £866m in March, compared with an inflow of £1.8bn in the month last year.
peter.walker@ft.com
