Experts see signs of a recovering market
Net mortgage approvals for house purchases rose to 61,300 in March – the highest number of net approvals since September 2022, the Bank of England (BoE) has reported.
Net approvals for remortgaging, however, decreased from 37,700 to 34,200 over the same period.
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 17 basis points to 4.73% in March.
The BoE’s latest Money and Credit report also revealed that individuals borrowed, on net, £0.3 billion of mortgage debt in March, with the annual growth rate for net mortgage lending remaining slightly negative at -0.1%.
Meanwhile, gross lending rose from £18.6 billion in February to £20.1 billion in March – its highest since February 2023. Likewise, gross repayments increased from £16.6 billion to £19.5 billion over the same period.
“Today’s figures mark the sixth consecutive increase in mortgage approvals, a sign that the market is on the road to recovery and consumer confidence is growing,” commented Ryan Davies (pictured left), strategy director at Bluestone Mortgages. “However, with mortgage rates creeping up in recent weeks, affordability remains a key concern.”
For Tony Hall (pictured centre), head of business development at Saffron for Intermediaries, it certainly feels like the mortgage market recovery is underway.
“All eyes are now on when we might see that first base rate cut since the onset of the pandemic, which should drive more consumers back to the market,” Hall said. “The economy still faces a number of challenges, with inflation falling at a slower rate than many expected, and this could delay a rate reduction by the Bank of England. However, it’s refreshing that the debate about the Bank of England’s position has clearly shifted to when, and not if, rate cuts will happen.”
Jonathan Samuels (pictured right), chief executive of Octane Capital, pointed out that stability is the key when it comes to mortgage market health.
“While we’re yet to see interest rates fall, a freeze since September of last year has certainly steadied the ship and provided the nation’s homebuyers with the confidence required to re-enter the market,” Samuels said. “As a result, we’ve now seen the level of mortgages being approved climb consistently for the last six months and this is a significant sign that the market is slowly, but surely, returning to full health.”
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