Mortgage approvals see slight dip in March - but remain higher than pre-pandemic

There were 70,700 mortgage approvals in March - down from just under 71,000 in February - but have remained higher than the average 12-month pre-pandemic level of 66,700 in February 2020. Remortgage approvals rose in March, but remain slightly above pre-pandemic levels.

The average interest rate on new mortgagtes increased to 1.73% in March, from 1.59%.

Net borrowing saw a jump at £7.0 billion in March - a significant increase compared to lending.

CEO of Octane Capital, Jonathan Samuels, commented:

“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.

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 topline market statistics.

"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.”

Kay Westgarth, head of sales, Standard Life Home Finance, comments:

“Today’s stats are, once again, a sign of a resilient mortgage market, and although activity in March dipped slightly, it still remains higher than pre-pandemic levels which is encouraging.

“That said, with the climbing cost of living, those with life savings and pension pots are likely to feel the pinch in the coming months as over-55s feel the compound effect of rising bills and soaring inflation, and a greater number of these individuals may well need to augment their retirement income in order to meet everyday costs. This is where equity release can play such a vital role, to help them achieve the comfortable lifestyle they deserve. As the average UK house price continues its trend of upward growth, it is essential for older homeowners to be aware of the benefits offered by equity release, as a powerful tool to help manage their wealth by freeing up equity currently locked in their properties.”

Steve Seal, CEO, Bluestone Mortgages, said:

“While it’s reassuring to see that mortgage lending to individuals has increased given current inflationary pressures, affordability concerns are, and will continue to be, a key challenge for consumers. As a growing number of customers are feeling a squeeze on the cost of living due to increased utility and fuel costs, as well as a hike to national insurance contributions, we expect to see a growing cohort of customers locked out of the mainstream mortgage market. Our own research found that nearly a quarter (23%) of non-vanilla customers have been turned down for a mortgage.*

“For these individuals, it’s important to remember that hope is not lost. Specialist lenders have a range of solutions available to help those looking to climb onto or up the property ladder, regardless of their financial background. Ultimately, all lenders have the responsibility to point these customers in the right direction to ensure that they too have the opportunity to secure their homeownership dreams.”