The total value of mortgages lent rocketed last month as buyers face more affordability roadblocks to home ownership.
Some 70,933 mortgages were given the green light in February, compared to 73,841 in January, according to the Bank of England’s monthly money and credit figures.
However, the total value lent rose (from £16.6bn to £16.7bn), meaning the average value of a mortgage loan is 10.4 per cent higher than this time last year.
The average mortgage was £235,474 in February, up 4.6 per cent on just a month ago.
Lawrence Bowles, director of research at Savills, said: “With the Bank of England looking set to increase the base rate of increase further through the year, we can expect to see further rises in mortgage interest costs. That will limit what buyers can pay, especially with the affordability stress tests currently in place and rapidly rising energy prices putting pressure on household finances.
“While the imbalance between resilient demand and very low level of stock available is continuing to support price growth, we can expect to see mortgage advances and other measures of transaction activity start to ease as we head towards the autumn.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the figures were “a useful pointer to direction of travel of the property market.”
He added: “Unlike the strong house price figures of last week, reflecting activity of the previous few months, these will be among the first to take into account concerns about rising mortgage rates, inflation and the tragic events in Ukraine. We are also seeing this on the ground.
“The downward trend is likely to be repeated in other surveys over the coming months. However, we have seen no sign of a correction and nor do we expect to while available stock remains in such short supply.”