Mortgage borrowing rises to highest level since October 2022

Latest data from the Bank of England showed that individuals borrowed a net £2.4 billion on mortgages in April, a significant increase from the previous month’s £500 million.

The surge in mortgage borrowing, the highest since October 2022, indicates that prospective homebuyers rushed to secure lower interest rates. The data suggests that the drag on mortgage lending from higher interest rates is fading, with the growth in annual net borrowing has turned positive for the first time in nearly two years. Lenders have been raising mortgage rates since last spring, but the recent reduction in borrowing costs and moderation in inflation have revived activity in the housing market. However, there are signs that demand for homes has plateaued, with mortgage approvals remaining flat in April.

Remortgaging net approvals fell 10.7% to 29,900 over the same period.

The data comes as the number of UK residential transactions in April rose by 10% to 90,430 from a year ago, HMRC data showed, up 5% on the previous month. This was the fourth month in a row provisional seasonally adjusted home sales were higher. 

John Phillips, CEO of Spicerhaart and Just Mortgages, said “The slight fall from 61,300 net mortgages in March to 61,100 April presents a pause in the upward momentum we’d witnessed in the housing market. But it’s important to analyse this within the broader context.

“At Just Mortgages, we’ve observed a similar trend, with activity moderating after a particularly strong March. This could be due to a number of factors, including potential seasonal fluctuations or buyers taking a wait-and-see approach as rising interest rates are factored into their calculations.

“It’s crucial to maintain perspective. Mortgage approvals remain at healthy levels overall. However, navigating this evolving market landscape requires expert guidance. With swap rates continuing to influence mortgage product pricing, securing the most suitable and competitive rates becomes even more important.

“This is where experienced brokers come to the forefront. Advisors must stay up-to-date on market shifts in order to guide clients through the complexities of securing the right mortgage solution. By offering personalised advice and unwavering support, we empower our clients to make informed decisions and achieve their property goals, even in a changing market environment.”