Gross lending also increased in BoE's latest Money and Credit Report
Net approvals for both house purchases and remortgages continued to rise in November, the Bank of England (BoE) has reported.
Net mortgage approvals for house purchases rose to 50,100 in November from 47,900 in October, while net approvals for remortgaging increased to 27,000 in November from 24,000 in the previous month.
The BoE’s latest Money and Credit report also showed a nine-basis-point increase in the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages, which now sits at 5.34%.
Mortgage lending to individuals was at net zero in November compared to £0.1 billion of net repayments in October, and the annual growth rate for net mortgage lending reached 0.3% in November, the lowest since the monthly series began in March 1994.
Gross lending increased to £16.6 billion in November from £15.9 billion in the prior month, while gross repayments decreased to £15.6 billion from £17.2 billion over the same period.
“The rise in mortgage approvals today suggests a gradual recovery from the turbulence in the mortgage market,” commented Reece Beddall, sales and marketing director at Bluestone Mortgages. “With December’s inflation dropping to 3.9% and the Bank of England holding year-end interest rates, a glimmer of hope appears on the horizon.
“Lenders swiftly reducing rates in the first week of 2024 is an additional welcome relief for borrowers nationwide, no doubt easing some of their financial concerns.”
Mark Harris, chief executive at mortgage broker SPF Private Clients, said that with 2023 being a disappointing year in terms of amount of business done, lenders are keen to get this year off to a cracking start.
“Back in November, mortgage approvals rose as the pause in rate hikes gave borrowers hope that rates may have peaked,” he added. “Fast forward to a new year, and we find ourselves in the midst of a mortgage price war.
“With HSBC launching a five-year fix at 3.94% today, following Halifax’s reductions of up to 0.83 percentage points on Tuesday, the gloves really are off. It is great news for borrowers who have struggled with affordability over the past few months. Although borrowers remortgaging this year will still see an increase in their payments, the pain will not be as bad as it could have been.
“With a record number of sellers coming to the market on Boxing Day, 2024 could be a promising year for the housing market.”
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