Mortgage approvals rise 5 per cent in UK

Mortgage approvals in the UK were up 5 per cent from 92,282 in Febraury to 96,871 in March, the figures released on Tuesdayt by the Bank of England revealed.

The number of house purchase loans increased 3 per cent, from 51,947 to 53,504 over the same period of time, increasing from £7.8 billion in value to £8 billion.

The number of loans approved for remortgaging increased 9 per cent, from 27,586 to 30,088 and totalled £4.1 billion in value in March.

Approvals for other purposes, as also further advances, were up 4 per cent, from February's 12,749 to 13,279 in March.

Gross mortgage lending amounted stood at £12.5 billion in March, which was less than Febuary's £12.7 billion.

According to Mortgage Advice Bureau's head of lending Brian Murphy there were 25 per cent more mortgage applicants in the first three months of the year, as against the last three months of 2012.

Potential home-buyers were clearly enthused with the variety of products available on the market. He added, with record-breaking rates appearing on almost a daily basis, there were plenty of great deals to be found whether one was buying a new property or remortgaging an existing home.

According to Intermediary Mortgage Lenders Association executive director Peter Williams, the Bank of England figures showed a 5-per cent monthly rise in the value of mortgage lending as also a rise in the volume of approvals across the board.

One reason would be the partial relaxation of borrowing criteria and wider availability of higher LTV deals as lenders adjusted to the competition resulting from the Government's Funding for Lending Scheme.

He added, although the scheme had improved the availability of mortgage credit, there were concerns about the decision to focus its extension primarily on lending to SMEs.

Net mortgage lending increased by £430 million below the average of £600 million over the previous six months.

According to the central bank, the availability of mortgages improved in the first quarter and may continue to increase further in the current period after banks got access to cheaper credit under Funding for Lending Scheme.

According to Hometrack Ltd improved sentiment and a shortage of properties for sale were supporting values, while new government measures would increase confidence further.

Gross mortgage lending was down to £12.5 billion in March from £12.7 billion in February, according to today's report.

Mortgage approvals stood at around about half the monthly average in the decade to 2007, when the financial crisis struck.

The report also showed that consumer credit was up £493 million in March, with credit-card lending increasing £192 million.