Demand for mortgage lending has risen to its highest level since the end of 2013, new figures from the Bank of England show.
The Bank’s latest Credit Conditions Survey, which covers the second quarter of 2015, revealed that mortgage demand rose “significantly” during the period following three consecutive quarters of sharp falls. The Bank predicted that demand would also increase in the third quarter of this year.
Howard Archer from IHS Global Insight said: "It increasingly looks like the housing market is on the up after being in the doldrums during most of 2014 and the start of 2015."
The supply of mortgages was also reported to have increased, but by a smaller amount. There was no change in maximum loan-to-value and loan-to-income ratios, the Bank found.
Richard Woolhouse, chief economist at the British Bankers' Association, said: "It's heartening to see that demand for lending from small businesses has increased significantly as this is a clear, positive sign that firms have the confidence to take on borrowing to invest and expand.
"At the same time we're seeing demand for mortgages increase, as consumers take advantage of some of the extremely competitive mortgage deals that are available from banks at the moment.
"This, coupled with the increase in demand for personal loans, shows that people are starting to feel more financially secure and ready to commit to making bigger purchases."