Mortgage approvals increase

Altogether 31,660 loans were approved buyers of new homes, 5 per cent more than during the previous month and the highest level since July last year, according to the British Bankers’ Association.

The data backs up anecdotal evidence from estate agents that potential buyers are beginning to return to the market ahead of the traditional spring bounce.

But despite the improvement, the figure is still down on the 35,124 mortgages for house purchase that were in the pipeline in March last year, and it is significantly below the 70,000 to 80,000 approvals a month that are considered consistent with a stable housing market.

Mortgage advances continued to be subdued in March, with total lending of £7.75 bn, below both February’s figure and the recent six-month average of £7.9bn.

The BBA attributed some of the weakness to households remaining focused on paying down debt, leading to people overpaying their mortgages.

Unsecured borrowing remained negative in March, as consumers repaid £38m more on credit cards, loans and overdrafts than they took on in new debt.

Loan and overdraft borrowing also contracted for the 20th consecutive month, with people repaying £187m more than was advanced in new debt.