House purchase mortgage approvals rose by 8% to 60,400 in February, according to the Bank of England.
Remortgage approvals rose 22% from 30,900 to 37,700 month-on-month.
Homeowners borrowed £1.5bn of net mortgage debt in February compared to £1.1bn in January.
The average interest rate on newly drawn mortgages fell by 29 basis points to 4.9% compared to the previous month.
Simon Gammon, managing partner at Knight Frank Finance, said: “The recovery in housing market activity is taking hold despite an uncertain start to the year for mortgage rates. Hotter-than-expected inflation data in January and February prompted a few lenders to notch up mortgage rates, which knocked sentiment, but not enough to kill the market’s momentum.”
Inflation rose by 3.4% in February. As inflation continues to exceed the Bank of England’s 2% target, the bank voted to keep the base rate at 5.25%.
The average two- and five-year fixed rates, meanwhile, remain stable at 5.8% and 5.38% respectively, according to Moneyfacts.
“More dovish tones from the Bank of England at the March meeting will underpin more increases in lending during the months ahead,” said Gammon. “And I wouldn’t be surprised to see approvals for house purchase moving above the 70,000 mark we were seeing during 2019 a little later this year.”
“Speculation over when the first base rate cut will arrive is giving consumers the confidence to act,” he added.
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