The number of loans approved by banks fell year-on-year for the ninth consecutive month in March.
Figures published today by the British Bankers’ Association, which covers lending by the UK’s six major banking groups, show banks approved 72,074 mortgages in March, down 10.3 per cent from the 80,375 approved a year earlier.
Approvals have been down year-on-year each month since July, but they have grown month-on-month since December.
Approvals for house purchase and remortgage lending have now grown for four and three months respectively.
Gross lending was down 3 per cent, from £9.9bn in March 2014 to £9.6bn in March 2015.
SPF Private Clients chief executive Mark Harris says: “House purchase approvals are trending upwards with higher demand seen in the first quarter of the year. While numbers are down on the same month last year for house purchases and remortgaging, that was a frenzied time for the market and we now see a more considered phase, which is also 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. Lenders have ambitious targets for the year and in order to achieve them will either have to compete on rate or loosen criteria. While many are not yet prepared to do the latter, they are tightening margins and cutting rates across the loan-to-value curve.”
E.surv director Richard Sexton says: “You can’t blame Britain’s prospective homeowners for being cautious. Housing has become a hotly contested political issue. Amid a storm of assertions and finger-pointing, many buyers are laying low to see what happens.
”Despite this understandable damping effect, many prospective homebuyers are taking advantage of the unique opportunities provided by low interest rates and a mortgage price war between the major banks. However, the modest growth in house purchase approvals is welcome in the face of election uncertainty.”