House purchase mortgages were 43,870 in February, up slightly
from 43,732 in January, says the British Bankers' Association.
decreased to 72,193 from 79, 926 in January while equity withdrawal
increased to 40, 669 from 39, 477.
The share of
remortgaging is now close to half of all approvals.
BBA says that by
contrast, house purchase approvals have been fairly constant and
low for the last five months and despite ticking up slightly in
February loans for equity withdrawal have continued to trend
BBA says that gross
lending was slightly weaker than January but stronger than the
recent average partly reflecting very strong remortgaging
approvals, which feed through to gross lending much sooner than
approvals for house purchase,
Net mortgage lending
was stronger in February, reflecting lower repayments. BBA says the
annual growth rate has stabilised around 13 per cent in recent
directors David Dooks says: "In an environment of tightening
lending criteria, re-mortgaging, either to fix, re-fix, or reduce
borrowing costs, has been a clear influence on mortgage data in the
first two months of this year, resulting in mainstream lenders
picking up market share. Despite the relative pick-up in February's
reported retail sales, consumer credit and cards in particular,
continued to be subdued."
RICS chief economist
Simon Rubinsohn adds: "The modest pick up in mortgage lending
in February reflected in BBA data released today is unlikely to be
sustained. Buyer enquiries (according to the latest RICS survey)
have slipped back to the lows seen in the wake of the Northern Rock
crisis and this trend is likely to persist through the spring. The
recent sharp rise in Libor rates is indicative of the reluctance of
banks to lend to each other and suggests that mortgage finance will
remain in short supply for some time to come.
levels still remain strong which in part reflects the ending of a
large number of fixed rate mortgage deals. However, with lenders
scaling back on loan to value ratios we expect a further drop in
mortgage equity withdrawal over the coming months. This is likely
to hit homeowners looking for cheaper sources of credit to finance
big ticket purchases."