Mortgage approvals for house purchases rise 19%

The 37,937 loans approved was also the highest level since May last year, according to the Bank of England.

In addition, the Bank of England also reported a rise in net mortgage lending, which strips out redemptions and repayments, to £1.51billion, up from £1.08billion in January.

The figures released were ahead of analyst expectations and may show the first real signs that the housing market has "bottomed out".

Simon Rubinsohn, Royal Institution of Chartered Surveyors chief economist said:  "Further evidence that the pick-up in buyer interest in the housing market is feeding through into actual activity is evident in the latest mortgage approvals data from the Bank of England.

"The number of mortgages sanctioned in February climbed to the best level since May 2008. This reflects in no small measure the improvement in affordability in the wake of the 20% drop in house prices and the sharp reduction in borrowing costs.

"Even so, accessibility to the market still remains a problem with many first-time buyers struggling to find the necessary deposit to compensate for the much reduced loan to value ratios now being offered by lenders.

"While it is likely that the numbers of mortgages being approved will continue to edge upwards over the coming months, the level of activity will still remain low by historical standards. The fact that transactions have bounced off the bottom hasn’t reduced the need for the Government to take further steps to enhance the flow of mortgage finance."

Meanwhile, Council of Mortgage Lenders economist Paul Samter said: "February’s approvals for house purchase – 38,000 on a seasonally adjusted basis – were nearly a fifth higher than in January and marked the first material improvement in approvals since mid-2008.

"This is welcome news, but we will need to see a few more months’ figures before we can say with any confidence that market conditions are showing a fundamental improvement. Transactions remain historically very weak, and this makes it harder than usual to adjust the figures for the normal upturn that happens in the spring."

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