Mortgages approvals rise for fourth month in a row

30th October 2024

Latest Bank of England Money and Credit data has shown that mortgage approvals increased in September for the fourth consecutive month.

Net mortgage approvals for house purchases rose from 56,100 in January, to 60,400 in February. Net approvals for remortgaging also increased, from 30,900 to 37,700 during this period.

Individuals borrowed, on net, £1.5 billion of mortgage debt in February, compared to £1.1 billion of net repayments in January. Net mortgage borrowing dipped by £300 million to £2.5 billion in September, following three consecutive monthly increases. Gross lending slipped back to £19.3 billion in September, from £19.7 billion in August with repayments falling by £600 million over the same period, to £17.6 billion.

The annual growth rate for net mortgage lending rose to 0.9% in September from 0.7% in August, continuing the upward trend which began in April.

Melanie Spencer, Sales Lead at Target Group, said: “With net mortgage approvals up in September, today’s data shows the positive reaction by consumers to both the base rate cut in August and the growing competition among lenders for new business. Combine this with a decrease in consumer credit borrowing, particularly through credit cards, and it highlights the growing confidence we have seen the market, but also signs that the pressures of the cost-of-living crisis are starting to ease for families.

“Of course, premonitions of a painful budget have set the cat amongst the pigeons and pushed some to just take a breath and adopt a wait and see approach. Once the Budget is out of the way, we have to hope this releases this pent-up demand to get on with moving plans – but it all depends on what is announced. Either way though, the market will continue to adapt and find ways to streamline the mortgage process, all while continuing to innovate and explore new ways to keep the market moving. There’s no question technology will play a critical role in meeting this demand and driving efficiencies across the entire market.”

John Phillips, CEO of Spicerhaart and Just Mortgages, said: “September’s increase in net mortgage approvals to 65,600 marks the highest level in two years, since August 2022, demonstrating clear signs of renewed vigour in the housing market. Alongside this, the rise in remortgage approvals to 30,800 shows that both buyers and existing homeowners are eager to engage with the market again. A potential interest rate cut in November would add further tailwinds to this positive momentum, making homeownership and refinancing more attractive.

“With the Budget announcement tomorrow, we hope the government fans these flames instead of throwing cold water over what is clearly a positive step forward. Now is the time for targeted support that sustains this upward trend, offering stability and opportunity to those looking to enter or remain in the housing market.”

Rachael Hunnisett, director, longer-term lender April Mortgages, said “This is positive news for the mortgage market as mortgage approvals continue to rise. Over the past year we have seen increased competition among lenders for business, with more and more lenders adapting their lending criteria to attract new borrowers onto their books.

“Trading has been volatile for a reasonably sustained time since the mini budget in 2022. The whole industry will be looking to Rachel Reeves’ budget on Wednesday as to how this might impact the mortgage market. While an increase in approvals is a positive sign for borrowers, we are not out of the woods yet.

“Homeowners are still coming off historically low fixed-rate deals onto much higher rates, experiencing what is known as ‘rate shock’ and this will put some borrowers in a more vulnerable position. Mortgages which provide long-term certainty should be weighed up against short-term ‘cheap’ rates which provide no peace of mind over financial security in the mid to long term.”

Tom Cuppello, Director, Risk,  Broadstone said  “The property sector remains resilient with mortgage approvals rising to their highest level in over two years as the Bank of England’s rate cut in August sent buyers back into the market for the traditionally busy Autumn period.

“Mortgage rates appear to set for a degree of volatility over the next ten days. Nerves around the Budget and the extent of government borrowing have sent UK gilt yields rising but the Bank of England is widely expected to cut rates at its meeting next week. All eyes will be on how the property market withstands this latest bout of turbulence at a crucial period before Christmas.”