Figures released from the Bank of England today show net mortgage approvals for house purchases rose from 47,900 in October to 50,100 in November.
The BoE’s monthly Money and Credit Report also reveals net approvals for remortgaging increased from 24,000 in October to 27,000 in November.
Commenting on the latest numbers, Bluestone Mortgages sales and marketing director Reece Beddall said the rise in mortgage approvals suggested a gradual recovery from the turbulence in the mortgage market.
“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.”
SPF Private Clients chief executive Mark Harris said: “Back in November, mortgage approvals rose as the pause in rate hikes gave borrowers hope that rates may have peaked.
“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”.
He added: “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. 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.”
London estate agent and former Rics residential chairman Jeremy Leaf said the BoE figures made impressive reading for those seeking further confirmation of the housing market’s resilience – highlighting two reasons.
“Firstly, they cover a period of continuing turmoil from a few months ago when inflation and interest rates remained stubbornly high. Secondly, these numbers don’t include over a third of transactions which are financed by cash or existing resources.
“With the cost of living and mortgage rates starting to ease, we have seen an improvement in confidence and more interest from buyers and sellers in our offices after returning from the holiday.”
Bestinvest personal finance analyst Alice Haine appreciates the BoE figures offer encouragement – and the swathe of rate cuts being offered by lenders of late – but stresses the pressures that remain for many borrowers.
“The mortgage market may be heating up with rate cuts dominating the news, but this won’t fully ease the pain for the roughly 1.6 million existing borrowers with cheap fixed rate deals expiring this year. They still face a heavy jump in interest payments when they switch onto a new product, with the only comfort that the situation could have been much worse”.
