Gross mortgage lending was up 4.6% year-on-year to £13.4bn in February, the BBA’s high street banking data shows.
On a net basis February’s net mortgage borrowing was 2.5% higher than the year before.
Eric Leenders, managing director for retail banking at the BBA, said: “Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year.
“Consumers’ use of credit cards and personal loans reflect last month’s increased spending figures.
“Businesses continue to exercise a cautious approach to borrowing, using cash reserves and alternative lending sources to finance their operations.”
Bhupender Singh, chief executive of Intelenet Global Services, part of Blackstone Group, said: “Low interest rates have been a deciding factor for people looking to take out a mortgage.
“As homeowners both existing and new, take advantage of low interest rates, it makes it more important than ever to ensure banks are able to cater to these surges in demand.
“Developments in the mortgage space is connecting financial advisers and mortgage brokers with nearby customers, whenever and wherever they are needed, in order to ensure the ongoing provision of an in-person service when trying to secure a mortgage.”
Singh added: “When getting onto the property ladder, customers are looking for the best deals, including a quick turnaround so they can snap up their dream home as quickly as possible.
“The industry can profit by embracing AI and automation as a way to speed up the application process. We have seen one national bank use tech to shorten the approval time from 11 days to 48 hours.”