Mortgage approvals soar

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The Independent Online
MORTGAGE approvals by leading British banks last month leapt by more than 29 per cent. But the sharp increase may partly reflect a surge in refinancing to take advantage of the recent low point in fixed-rate mortgages.

The British Bankers' Association said yesterday that the number of mortgage loans approved in February rose by 29.2 per cent to 24,935. In terms of value approvals rose by 31.6 per cent to pounds 1.203bn.

It acknowledged that some of the increase might have reflected a rush to refinance mortgages and take advantage of low fixed-rate mortgages prevailing at the time. Adrian Coles, of the Council of Mortgage Lenders, agreed. 'It could have been refinancing because that was the month when the jitters in the world bond markets began,' he said.

But he doubted whether refinancing would have accounted for all the increase. The housing market has been recovering for the past few months and the figures may reflect that improvement.

Mr Coles said it also appeared that the banks might be losing market share to building societies. Recent society figures showed a 60 per cent surge in approvals in February to a total of pounds 2.9bn.

The value of gross loans made by banks during the month, which lags approvals by approximately two months, rose by almost 3 per cent to pounds 1.039bn.