Annual comparisons for the month of February for remortgage approvals revealed that there was a drop in demand as has been the trend. The British Bankers’ Association (BBA) shared that there were 61,361 loans which was down from the 76,938 approved mortgages in February of 2015. Remortgages declined by 16% from the 21,861 approved in February 2014 to only 18,357 for February of this year.

House purchase approvals also showed a decline by 20.2% from 46,785 last year in the second month to only 37,305 for February 2015. By value new home mortgage approvals fell from £7.4bn to £6.2bn in an annual comparison.

Annual comparisons were down, but bank approvals increased by 4.1% in a monthly comparison from January to February.

Richard Woolhouse, BBA chief economist, remarked, “The increase in mortgage approvals is welcome news and a sign that the housing market is beginning to improve. We’re seeing stronger demand for mortgages as consumers take advantage of some of the very competitive deals currently available.

“Demand for loans and other types of personal borrowing is rising at its fastest rate since the financial crisis. Consumers are feeling increasingly confident about buying big ticket items, such as cars or home improvements, as the recovery really begins to take hold.”

Because of rising demand from borrowers and increased consumer confidence, lenders are expected to emerge from the competitive environment they are currently within. This will see borrowers seeking remortgages and mortgages finding higher interest rates in the very near future as lenders no longer need to offer such attractively cheap interest rates to gain attention. The expected changes in the lending environment should cause homeowners and hopeful home buyers to become alert to the possibility of losing out on historically low rates that could offer substantial savings over the term of the loan.

Shopping around now for a new deal could be beneficial for those about to end their current mortgage deal, those that have already moved onto the lender’s risky standard variable rate (SVR), and those seeking a lower interest rate.