The British Bankers Association (BBA) has reported that there was a significant rise in the number of mortgage approvals in April.
House purchase approvals were higher than last month and 3% higher than in April 2014.
Deposits with high street banks strengthened in April as the annual opportunity to invest in NISAs opened and attracted more funds than the same month a year ago.
Unsecured borrowing is growing at its highest annual rate, of 4.9%, since autumn 2010, reflecting strong consumer confidence.
Net borrowing by businesses has been positive in three of the last four months, with increased lending across several industry sectors.
Richard Woolhouse, chief economist at the BBA, said: “British businesses and consumers have started to put their foot on the gas. There appears to be broad confidence about the economy, which the banks are supporting through affordable credit, leading to rises in borrowing across the board.
“Business lending has risen in three of the first four months this year indicating that we might have reached a turning point. There was a significant pre-election jump in mortgage approvals which we would expect to continue in the coming months.
“There was a sharp rise in the amount savers deposited in their bank accounts and also in the amount people are borrowing through personal loans and credit cards. This suggests that consumer spending will continue to drive the British economy forwards.”
Mark Harris, chief executive of SPF Private Clients, added: “There has been much talk of a pre-election lull in the upper echelons of the housing market but in the mainstream it was ‘business as usual’ with mortgage approvals rising significantly in April. The frenzy we saw in the first part of last year has not been repeated yet this more considered phase, with growing confidence among buyers, is likely to be more sustainable.
“Borrowers are taking advantage of record low mortgage rates and the signs are that these will continue to be competitive over coming months. When a record-breaking mortgage rate is pulled it is soon replaced by an even lower one as lenders compete for business. They have ambitious targets for the year and in order to achieve them will either have to compete on rate or loosen criteria. While many are not yet prepared to do the latter, they are tightening margins and cutting rates across the loan-to-value curve.
“Remortgaging numbers also continue to grow as borrowers take advantage of lower rates and their improved circumstances to secure a new deal. Many people have more equity in their homes than they did a year or two ago, which should make it easier to remortgage. And with renewed talk of the possibility of an interest rate rise at some point, many borrowers are opting for the security of a cheap fixed-rate mortgage.”
