However, net borrowing of mortgage debt saw a significant drop and fell from £700m in February to net zero in March, the lowest level seen since June 2011. If the onset of the Covid pandemic is excluded, net borrowing was at the lowest level for 12 years.

Gross lending was up slightly, from £20.4bn in February to £20.6bn in March, and gross repayments fell from £19.9bn to £19.3bn. While net mortgage approvals increased for the second month in a row, the level still remained below the monthly average for 2022, of 62,700.

Approvals for remortgaging also increased to 32,200 from 28,200 in February.

The figures also show that individuals borrowed an additional £1.6bn in consumer credit in March, compared to £1.5bn in February.

The data paints a mixed picture of the housing market.

‘There is slightly more confidence in the market’

Tomer Aboody, director of property lender MT Finance, said: “Higher mortgage approvals in March show that there is slightly more confidence in the market which is cemented by the prime minister’s push for lower inflation and the markets predicting lower long-term rates than first indicated.

“However, while rising, transactions are down compared with before the pandemic so some assistance from the government to try to push volumes is now required.”

‘Inflation still horribly high and worryingly sticky’

Next week’s decision by the Monetary Policy committee (MPC) could also have a big impact on the housing market along with inflation which continues to remain high. Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The growth in mortgage approvals is due in no small part to falling mortgage rates – which have been creeping south since the peak in October last year.

“They’re still significantly higher than before the rate rises kicked off, and the falls took a break in March after the surprise inflation bump, so the effective interest rate on new mortgages was up 17 basis points to 4.41 per cent in the month.

“There are still headwinds, with inflation still horribly high and worryingly sticky – alongside growing concerns about a global slowdown and possible stagnation. However, there are plenty of people who are hoping the UK can avoid a recession this year, and that jobs could prove reasonably resilient – protecting those with mortgages to pay.”

Alice Haine, personal finance analyst at Bestinvest, added: “Borrowers should not expect mortgage rates to suddenly drop anytime soon though. Rates have actually edged up slightly in recent weeks, as lenders brace for another increase in the official interest rate, which they use to price their lending to homeowners.

“However, with the potential for more rate rises to come, buyers wanting to push ahead with a purchase should ignore the slight ups and downs that come with a more competitive mortgage market and plough on.

“House prices are showing tentative signs of stabilisation, so this year could be good time to buy before new government schemes, such as the mooted return of its Help to Buy scheme, and easing interest rates further down the line propel demand once again, taking house price growth back into positive territory.”