House purchase approvals drop for 2nd month….

Mortgage lending fell for a second successive month in February, the Bank of England has confirmed.

Its figures back earlier data from the Council of Mortgage Lenders and the British Bankers Association.

The Bank of England figures show that 51,653 house purchase mortgages were granted in February, the lowest number since last September.

The figure was down on the Bank’s revised figure of 54,187 for January, and was less than had been predicted for February. Economists had forecast a fall to 53,700, according to a panel of estimates by Bloomberg.

However, remortgage lending in February increased by 3.8% to 26,771, said the Bank of England.

Brian Murphy, head of lending at Mortgage Advice Bureau, said the figures prompted concern: “The fact that overall mortgage approvals slipped again – with house purchase approvals down for the second successive month – shows how important it is to encourage more activity in this area.

“The equity loan aspect of Help to Buy will certainly help, but we must hope that the January 2014 launch for the mortgage guarantee scheme does not mean people hold back on home purchases before then.”

Meanwhile, mutuals increased their market share of mortgage lending in February. According to the Building Societies Association, their gross lending figure was £2.5bn, a market share of 23%, and the number of mortgage approvals was up from 21,020 to 24,295 since February 2012.

Paul Broadhead, BSA head of mortgage policy, said: “Building societies and other mutual lenders continued to show their commitment to UK home buyers in February. Both gross and net mortgage lending rose in a market where lending by other institutions remained weak.

“We welcome the Government’s renewed focus on the challenges faced by people looking to buy for the first time or move home, but it is a shame that the Help to Buy guarantee is needed.

“If all lenders acted to help first-time buyers and other creditworthy borrowers with smaller deposits, as mutuals have done consistently over the last year and more, this intervention would not be needed.

“Around one in three mortgages from BSA members are already to first-time buyers, many at higher loan to value ratios. The sector is in a strong position to lend in 2013.”

The latest Bank of England mortgage lending figures also show the near-accuracy of the e.surv forecast, made almost a month ago in early March.

The national valuations firm, which is part of LSL, uses its own data to forecast overall mortgage figures, usually weeks in advance of other figures.

For February, it predicted that house purchase lending fell to 49,019 advances – the lowest, it said, for seven months.