Analysis forecasts a stronger mortgage market this year
Mortgage approvals in the UK are expected to increase by 13.4% this year, reaching the highest annual total since 2021, according to analysis by mortgage advisory firm Alexander Hall.
The firm attributes the projected growth to improving market sentiment, economic stability, and better mortgage affordability.
Using Bank of England (BoE) data, Alexander Hall examined mortgage approval trends over the past 20 years to forecast the market’s performance for the year ahead.
The analysis highlights that 2024 saw significantly greater stability in the mortgage market, with buyer activity rebounding from 2023’s downturn. Last year, 754,983 mortgage approvals were recorded — up 30.8% from the 577,173 approvals in 2023, which marked the lowest annual total since 2010. By contrast, 2024 recorded the highest number of approvals since 2021, when the pandemic-era property boom was driven by temporary stamp duty relief.
The latest BoE monthly data showed mortgage approvals rising by 500 to 66,500 in December 2024, partially offsetting the previous month’s 2,300 decline. Remortgage approvals, however, fell for the second month, down 700 to 30,500.
Despite the scheduled return of stamp duty thresholds in 2025, Alexander Hall forecasts continued growth in mortgage approvals, with an estimated 856,346 approvals expected over the year.
“2024 was a far better year with respect to mortgage market activity, and we saw the number of approvals taking place climb considerably when compared to the previous year,” said Stephanie Daley (pictured), director of partnerships at Alexander Hall.
“However, it’s fair to say that there was a slight air of disappointment given that we only saw two base rate reductions, and this didn’t bring the improvement to mortgage affordability levels that many had hoped.
“The good news is that 2025 is set to be an even stronger year for the sector, and we’ve already seen a welcome boost in the form of an early base rate reduction, but, unlike last year, we’ve also seen lenders reducing rates in anticipation of improving market conditions.”
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