Gross mortgage lending fell 13 per cent to £10.5bn in the year to April 2015, data from the British Bankers Association has revealed, but despite the slump this represents a recent minor recover and is 2 per cent higher than in March.
Data from the BBA, published today (28 May), showed that monthly house price approvals are trending upwards and were 3 per cent higher in April than 12 months ago. The BBA said this may have been influenced by the introduction of the Land and Buildings Transaction Tax in Scotland.
Remortgaging and other approvals also increased in April and were 6 per cent higher and 7 per cent lower respectively. There were also “substantial” deposits into New Isas of £4.4bn in April 2015, compared with £3.9bn in April last year.
Richard Woolhouse, chief economist at the BBA, said: “Business lending has risen in three of the first four months this year indicating that we might have reached a turning point. There was a significant pre-election jump in mortgage approvals which we would expect to continue in the coming months.
“There was a sharp rise in the amount savers deposited in their bank accounts and also in the amount people are borrowing through personal loans and credit cards. This suggests that consumer spending will continue to drive the British economy forwards.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “The frenzy we saw in the first part of last year has not been repeated yet this more considered phase, with growing confidence among buyers, is likely to be more sustainable.
“Borrowers are taking advantage of record low mortgage rates and the signs are that these will continue to be competitive over coming months.
“Remortgaging numbers also continue to grow as borrowers take advantage of lower rates and their improved circumstances to secure a new deal.
“Many people have more equity in their homes than they did a year or two ago, which should make it easier to remortgage. And with renewed talk of the possibility of an interest rate rise at some point, many borrowers are opting for the security of a cheap fixed-rate mortgage.”
The latest house price data, published by the Office for National Statistics, showed annual house prices increased by 9.6 per cent in the 12 months to March 2015, up from 7.4 per cent in February, with Scotland seeing its highest annual increase in eight years.
donia.o’loughlin@ft.com
