Borrowers have taken advantage of recent months' rates reductions
Mortgage approvals for house purchases rose to 65,600 in September – the highest since August 2022, according to the latest data from the Bank of England (BoE).
Approvals for remortgaging, which only include remortgaging with a different lender, also increased to 30,800 from 27,700.
The annual growth rate for net mortgage lending rose to 0.9% in September from 0.7% in August, continuing the upward trend observed since April 2024.
Net borrowing of mortgage debt by individuals, however, fell by £0.3 billion to £2.5 billion in September.
The BoE’s latest Money and Credit report also revealed that gross lending decreased to £19.3 billion in September, from £19.7 billion in August. Similarly, repayments fell by £0.6 billion over the same period, to £17.6 billion.
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages was 4.76% in September, down by eight basis points from August. Over the same period, the rate on the outstanding stock of mortgages also rose slightly to 3.74% from 3.72% in the previous month.
“Today’s uptick in mortgage approvals is proof that borrowers took advantage of the lower rates we’ve seen in recent months,” said Ryan Davies (pictured left), strategy director at Bluestone Mortgages. “However, with looming uncertainty around the Autumn Budget and lenders starting to increase their rates again, we’re likely to see a drop-off in volumes in the coming weeks.”
For Stephanie Daley (pictured centre), director of partnerships at mortgage advisor Alexander Hall, the outlook remains positive for the remainder of the year.
“Despite the air of uncertainty caused by the looming Autumn Statement, the UK property market has continued to benefit from a robust level of mortgage market activity, recording a fourth consecutive month of positive growth where approvals are concerned,” commented Stephanie Daley (pictured centre), director of partnerships at mortgage advisor Alexander Hall.
“This momentum is only likely to build further once the dust has settled on tomorrow’s Budget, as both buyers and lenders will have a clearer view of where they stand within the market.”
According to Jeremy Leaf (pictured right), north London estate agent and a former RICS residential chairman, mortgage approvals always set the direction of travel for market activity over the next quarter at least.
“These latest numbers show that momentum over the past few months has been sustained,” Leaf said. “We are looking forward to an upward trajectory into early 2025.
“We have noticed in our offices too: buyers are shrugging off concerns about what may be a ‘painful’ Budget and consequences for affordability while taking advantage of rising incomes and anticipating lower mortgage rates.”
Any thoughts on the figures revealed in this Bank of England report? Share them with us by leaving a comment in the discussion box at the bottom of the page.
