Mortgage lending fell from £2.0 billion to £0.7 billion in February, said the Bank of England.

It added that this is the lowest level of net borrowing since April 2016, when you take out the pandemic lockdown period around March 2020.

However, mortgage approvals for house purchases (which is a predictor of future lending) increased to 43,500 in February, from 39,600 in January. This marked the first monthly increase since August 2022, said the Bank.

Approvals for remortgaging to a different lender also rose to 28,100 in February from 25,400 in January.

Green shoots

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “There are a few glimmers of hope in the mortgage market. Net lending was incredibly low – reflecting the miserable number of transactions during the month.

“However, anyone who has been watching the market for any signs of life may be cheered by the fact that we saw a small recovery in mortgage approvals for house purchases in the coming months – to 43,500. It’s still not much to write home about, and remains very depressed. But, if the first monthly rise since August last year is a sign of more to come, the falls in the property market may not be quite as bad as we had feared.”

Riz Malik, director at R3 Mortgages, added: “Green shoots should appear in the property and mortgage markets by the end of the next quarter. Aside from interest rates, those looking for a change of scenery will inevitably contribute to an increase in stock levels and a plethora of options.

“The only hurdle will come if the lenders put the brakes on lending. However, given recent mortgage rate cuts in the face of base rate increases, it appears that there is still an insatiable appetite to lend. Indeed, brighter days are on their way.”