Mortgage lending ground to a halt in March although the number of approvals rose from February, according to figures from the Bank of England.
The BoE said mortgage lending to individuals fell from a net flow of £0.7bn in February to net zero in March.
Excluding the pandemic this is the lowest level of net borrowing since June 2011 (£0.3 billion of net repayment).
But the BoE noted net mortgage approvals for house purchases rose significantly to 52,000 in March, from 44,100 in February, the highest number since last October, although still lower than the 69,777 signed off a year earlier, in March 2022.
The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 17 basis points, to 4.41% in March.
Consumers borrowed an additional £1.6bn in consumer credit in March, on net, compared with £1.5bn borrowed during February while households withdrew £4.8bn from banks and building societies in March.
The figures also showed households withdrew £4.8bn from banks and building societies in March.
Samuel Tombs at Pantheon Macroeconomics noted the data "show that households and businesses have become less willing to hold bank deposits since the collapse of SVB on March 10."
He pointed out the total value of retail deposits fell by £5.5bn in March, the second largest monthly withdrawal on record.
He said "financial conditions have undoubtedly tightened, strengthening the case for the MPC to stop raising Bank Rate after next week’s likely 25bp increase."