The number of mortgage approvals for house purchases in February 2024 reached the highest level since September 2022, data from the Bank of England has revealed.
The BoE's Money and Credit report for February 2024 found the number of mortgage approvals net of cancellations reached 60,400 in February of this year, the highest since Liz Truss’s "mini" Budget.
This was also a jump when compared with the previous month as 56,100 approvals were recorded in January.
A similar trend was discovered among remortgaging which saw its net approvals rise from 30,900 to 37,700 from January to February.
Lifetime Wealth Management mortgage and protection specialist, Katy Eatenton, said: “January was the busiest month in the mortgage market since before the mini-Budget debacle and the renewed confidence has continued into February.
“The trigger in the rise in mortgage approvals for house purchase was the rate war between lenders at the very start of the year.
“Once rates started creeping up, the mortgage market started to slow down a little and the March data from the Bank of England may reflect this."
But Savills head of residential research, Lucian Cook, cautioned net approvals remain below their pre-pandemic norm of around 66,000 in a market where cash and equity-rich buyers “still have a competitive buying advantage”.
The bank also found that the “effective” interest rate, or the actual interest paid, on newly drawn mortgages fell to 4.9 per cent in February, a decrease of 29 basis points.
Amount borrowed
Additionally, the research found individuals borrowed £1.5bn in February, compared to £1.1bn of net repayments in January.
This represented the highest borrowing since January 2023 when it reached £1.9bn.
It was also reported that gross lending rose from £17.1bn in January to £18bn in February, while gross repayments decreased from £18.5bn to £16.7bn over the same period.
The data found, in February, household deposits with banks and building societies rose by £6bn, which marked the fifth consecutive monthly increase.
This was mainly driven by flows into interest-bearing sight deposits of £3.5bn in February.
Additionally, the effective interest rate paid on individuals’ new time deposits with banks and building societies fell by 7 basis points to 4.46 per cent.
Meanwhile, the effective rate on the outstanding stock of time deposits increased by 5 basis points to 3.81 per cent in February, and the effective rate on stock sight deposits also rose to 2.11 per cent.
tom.dunstan@ft.com
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