March house purchase approvals move up slightly from February

The number of house purchase approvals crept up in March to reach 48,901.

Figures from the Bank of England show purchase approvals in March were higher than the 46,882 recorded in February, although they were below the previous six-month average of 54,201.

Remortgage approvals also rose from 27,257 in February to 27,880 in March, and are up compared with the average for the previous six months of 25,853.

Total net lending to individuals rose by £600m in March, while within this total net lending secured on dwellings increased by £300m.

Brian Murphy, head of lending at Mortgage Advice Bureau, says: “Borrowers are starting to take action to protect themselves against possible interest rate rises and this is reflected in the increased number of remortgages.

“For those who can remortgage, that area of the market is beginning to improve.”

But Murphy adds that although the Bank may want to keep the base rate low it might not be able to hold off a rise in inflation.

He adds: “Although loan app-rovals have risen there may be a slowdown in mortgage activity in April and May as many prospective buyers are putting decisions on hold until there is clarity on how the next parliament will deal with the budget deficit.”

The Building Societies Association revealed last week that gross lending by mutuals increased to £1.59bn in March – up 36% compared with £1.17bn in February.

Approvals were also stronger at £1.67bn compared with £1.38bn in February. Net lending by mutuals in March 2010 was -£764m compared with -£863m in February.

Adrian Coles, director-general of the BSA, says: “Lending activity appears to have gained some momentum following a sluggish start to the year, and the relatively strong approval figures bode well for the coming months.”