Net mortgage borrowing increased from £4.6bn in February to £7bn in March, show new figures from the Bank of England (BoE).

This, says the BoE, means borrowing remains above the pre-pandemic average up to February 2020 of £4.3bn.

Meanwhile, the number of house purchase approvals made dipped slightly, from 70,970 in February to 70,700, while the value of these approvals ticked up from £16.8bn to £17.2bn.

This is above the pre-pandemic average of 66,700.

Approvals for remortgages grew from 48,410 to 48,770, and from a value of £9.9bn to £10.1bn – below the pre-pandemic average of 49,500, the BoE reports.

SelfEmployedMortgageHub.com founder Graham Cox says: “If, as seems likely, we go into recession later this year and mortgage rates continue to increase, demand will invariably drop off.

“There’s a possibility the Bank of England base rate could be raised by 0.5% to 1.25% on Thursday and I wouldn’t be surprised if interest rates are north of 2% by the year end.

“If house prices start falling, then all bets are off. While we’re still seeing healthy demand from company directors and contractors, we’ve not yet felt the full effects of recent hikes in interest rates, National Insurance and the energy cap.”

And Altura Mortgage Finance founder Rob Gill comments: “Demand in the mortgage sector is increasingly being driven by remortgages as borrowers race to secure the best possible rates ahead of daily rate rises from mortgage lenders.

“First-time buyer interest is also strong as people seek bargains in a relatively slow market for city centre flats, with sellers made up of those seeking more space in the post-pandemic world, and landlords put off by increased regulation and higher taxes.”