Approvals rise by 12% in February

The number of house purchase approvals increased by 12% in February to 35,000, data from the Council of Mortgage Lenders reveals.

February’s approvals, worth £5bn, marked a 49% increase from the same time last year.

Remortgage approvals grew by 2% to reach 24,000, but remain 35% down on the number of remortgage loans advanced last year.

There were 12,600 first-time buyer loans, worth £1.5bn, in February with an average 75% LTV and average income multiple of 3.11.

Home mover loans totalled 22,600 and were worth £3.5bn, with an average LTV of 67% and an average income multiple of 2.81.

The proportion of fixed rate mortgages was 47% in February, unchanged from January and still at the lowest share of the market in around five years.

The share of tracker products in February was 36%, again unchanged from January, and at its highest level since CML records began in March 2005.

Bob Pannell, head of research of the CML, says: “With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future although the Stamp Duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer.

“The start of the year is traditionally a quiet period for mortgage lending.

“This year though, transactions have been affected by the ending of 2009’s Stamp Duty concession and the harsh weather, making it hard to identify clear trends in recent months.”