There were 70,700 mortgage approvals for house purchases in March, a drop from 71,000 in February
In March, mortgage approvals dropped and individuals borrowed less in consumer credit. The Bank of England’s money and credit statistics have showed that net mortgage borrowing rose while approvals for house purchases, which is an indicator of future borrowing, fell.
There were 70,700 mortgage approvals for house purchases in March, a drop from 71,000 in February, but this was above the 12-month pre-pandemic average up to February 2020 of 66,700.
Meanwhile, net mortgage borrowing increased from £4.6bn ($5.76bn) in February to £7bn ($8.77bn) in March. It remains above the pre-Covid average of £4.3bn ($5.39bn) in the year to February 2020.
While overall property market sentiment remains very good, a dip in the level of mortgages being approved was always likely to follow such a sustained period of heightened market activity, said Jonathan Samuels, chief executive of bridging and development lender Octane Capital.
This has been largely due to lenders tightening their belts following a number of consecutive base rate increases and we’re now starting to see this more cautious approach to lending start to materialise within top line market statistics, Samuels said.
With the cost of living also putting pressure on many households, this slow but steady decline in buyer activity is a trend we expect to see maintained throughout the remainder of the year, Samuels said.
Individuals borrowed an additional £1.3bn ($1.63bn) in consumer credit in March, on net, down from £1.6bn ($2.01bn) in February, but still higher than the 12-month pre-pandemic average up to February 2020 of £1bn ($1.25bn).
Our data at Equifax suggests that financial hardship is the elephant in the room, with many more people in the UK entering a state of financial vulnerability and the number of people falling behind on bills also rising, said Paul Heywood, chief data and analytics officer at Equifax UK.