UK Finance has estimated gross mortgage lending in February to have been £19bn, 4.9% more than a year earlier but below the monthly average of £21.4bn for 2017.
Remortgage approvals in the month are up over 9% in both number and value compared to February 2017.
Eric Leenders, managing director, personal finance at UK Finance, said: “There has been an increase in remortgage approvals compared to last year, as borrowers look to lock in to attractive deals amid speculation of further interest rate rises later this year.
“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing such as overdrafts continue to fall.
“Meanwhile real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”
John Phillips, Just Mortgages and Spicerhaart group operations director, said: “The latest figures from UK finance show that gross mortgage lending in February is estimated to have been £19bn, this is a 4.9% rise on February 2017. But the more significant news is that remortgage approvals are up more than 9%, both in terms of number and value compared to a year ago.
“This will most likely be because there is speculation of further rate rises, so borrowers are looking to lock in low rates now.
“It could also be to do with buy-to-let changes. Two years ago, the chancellor announced that, from April 2016, buy-to-let landlords and people buying second homes would have to start paying a 3% surcharge on each stamp duty band. In response, many of those that were going to be affected by the change quickly bought or remortgage before that it came into effect.
“Two years on, many of those who acted at that time will be coming to the end of their mortgage deals which could also explain some of the rise in remortgages. I think we will also see more activity in buy to let sector borrowing in the next week or so, because from April 1, the amount landlords can offset when calculating their tax bill drops from 75% to 50%.”
Stephen Pegge, managing director, commercial finance at UK Finance, added: “Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector.
“Credit balances have risen at an even faster rate as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence.”