March figures for high street banks show that mortgage demand may be weakening in the face of rising interest rates.
According to figures released by the British Bankers' Association (BBA) for mortgage lending in March, compared to March 2006, house purchase approvals were down 12% by number and 1% by value; remortgaging approvals were down 6% by number but up 8% by value; and approvals for equity withdrawal were down 6% by number but 1% higher by value.
Gross mortgage lending this March was £18.6bn, 5% more than £17.7bn in March 2006. There were 198,000 mortgages approved (for all purposes) in March; some 8% lower than in March 2006, with an aggregate value of £22.3bn. The average loan approved for house purchase was £150,800, some 12% higher than a year earlier.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.1bn, similar to February's increase, but less than the recent average of £5.5bn. The annual growth in net mortgage lending continued to stay around 14%.
David Dooks, BBA director of statistics, said: "Strong levels of gross mortgage lending reflect homebuyers and homeowners seeking out fixed rate mortgages as protection against rising interest rates. However, in the last two months net lending has risen less sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge."
