Mortgage approvals for house purchase fell to 71,000 in February, down from 73,800 in January, new figures published by the Bank of England (BoE) have revealed.

The figure still remains above the Bank’s 12-month pre-pandemic average up to February 2020 of 66,700.

Approvals for remortgages, which just capture remortgaging with a different lender, climbed in February to 48,200. This figure remains below the 12-month pre-pandemic average up to February 2020 of 49,500, but is the highest total since that month, when approvals hit 52,100.

The BoE’s data also confirmed that net borrowing of mortgage debt by individuals decreased during February, to £4.7bn. This figure was down from £5.9bn in January but remains above the pre-pandemic average of £4.3bn in the 12 months up to February 2020. Furthermore, the figures showed that gross lending increased to £26.1bn from £24.0bn in January.

Commenting on the figures, TMA Club development director, Lisa Martin, said the statistics show that the mortgage market continues to “perform strongly”, with activity now exceeding pre-pandemic levels.

“While approvals for house purchases fell, there was a rise in approvals for remortgaging, which would have contributed to the rise in gross mortgage lending to £26.1bn in February, from £24.0bn in January.

“However, with lenders raising their rates, mortgage product availability reducing significantly, along with continued rising living costs, borrowers will be looking for the best mortgage options available to them to keep their repayments at an affordable level. As demand increases, brokers will need to provide their customers with suitable and affordable products that meet their needs.”

Hope Capital CEO, Jonathan Sealey, added: “The main concern continues to be the rise in inflation and the impact this will have on the housing market in the coming months. However, on a positive note, while there was a small dip in February, the increase compared to February 2020, shows that there is still an appetite from people who want to create investment opportunities.

“Many things are out of our control at present, however with the market still remaining buoyant, the best thing we can do as a lender is to create solutions which reflect the demands and needs of brokers and borrowers.”

The BoE also published credit figures which revealed that individuals borrowed £1.9bn in consumer credit in February, on net. This figure is higher than the 12-month pre-pandemic average up to February 2020 of £1.0bn.

According to the data, this increase of consumer credit was split between £1.5bn of additional borrowing on credit cards, and £400m of borrowing through other forms of consumer credit, such as car dealership finance and personal loans.

AJ Bell head of personal finance, Laura Suter, said: “The nation is clearly already feeling the effects of the cost of living crunch, with credit card use soaring in February as rising prices push more people into debt.

“The total amount that we borrowed in the month was more than double the pre-pandemic average and shows just how soaring prices are affecting people’s pockets.

“What’s more, the £1.5bn put on credit cards in February is equal to the previous five months’ combined, and is a far cry from the peak of the pandemic savings where the nation paid off almost £5bn in credit card debt in a single month.

“However, the reality is that this debt figure will keep climbing in the next few months as more and more households see their spending exceed their income and have to put more monthly costs on credit.”

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