April’s mortgage approval volumes exceeded the average of around 63,100 recorded over the past six months.
Net mortgage borrowing decreased to £4.4bn in April, from £6.8bn in March and fell below the previous six-month average of £5.1bn.
Secured gross lending decreased slightly to £27.5bn in April, from £28.7bn in March, but remained above the six-month average of £24.8bn.
Sales remain below normal levels
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Mortgage approvals can be particularly helpful when trying to assess direction of travel for the housing market over the next few months at least. These numbers cover the period when it became clearer that war in the Middle East and consequences for an already-unsteady UK economy would not end quickly.
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“On the ground, activity has settled since but is just as much compromised now by further political and tax uncertainty. As a result, sales are proceeding but not at the level we would normally expect at this time of year and much more slowly than just a few months ago. Fall throughs are also increasing and prices softening, especially for flats.”
Richard Pike, chief sales and marketing officer at Phoebus Software, added: “After a strong Q1, which saw demand rise to a one-year high in March, it’s no surprise that [net] mortgage borrowing dropped back in April as the impact of the Iran crisis sent mortgage rates higher, affecting affordability.
“However, despite the monthly fall in net borrowing, mortgage approvals were up, demonstrating the resilience of the housing market.
“While the recent volatility has no doubt affected buyer confidence, there are signs that affordability pressures are beginning to ease as economic conditions improve. With governor Andrew Bailey also indicating the Bank of England could allow inflation to remain above target to support the economy, the indicators are that rates are beginning to stabilise. This should hopefully see market activity pick up again over the coming months.”
