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Approvals for house purchase hit 22-month high in July – BoE
The number of mortgages approved for house purchases totalled 61,985 in July, the highest figure since September 2022, which saw 65,100 approvals, data from the central bank showed.
The Bank of England’s (BoE’s) Money and Credit statistics revealed the level of purchase approvals was also up from 60,611 the month before.
Meanwhile, approvals for remortgage continued to move downwards, falling from 27,300 in June to 25,100 in July. The BoE said approvals for remortgages to a different lender had been declining since March this year.
Jonathan Samuels, CEO of Octane Capital, said this suggested “a property market that is very much on the up and we expect this outlook to only improve further following the Bank of England’s decision to cut interest rates for the first time in four years”.
He added: “Whilst the reduction itself may have been marginal at 0.25%, it’s likely to act as a floodgate moment for the housing market, with more buyers looking to make their move as the monthly cost of a mortgage continues to ease.”
Ryan Davies, strategy director at Bluestone Mortgages, agreed this was a good sign, saying: “Today’s mortgage approvals suggest that consumer confidence remains buoyant.
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“At a time when interest rates have finally fallen from their 16-year historic[al] high and lenders are ramping up the competition to drop their rates, we expect to see demand continue into the latter half of this year.”
Gross mortgage lending down, net borrowing up
Gross mortgage lending fell slightly to £19.6bn in July, down from £20.5bn in June, and was lower than the six-month average of £20.1bn.
Gross mortgage repayments also dropped by £900m to £17.4bn.
However, the value of net borrowing of mortgage debt rose from £2.6bn in June to £2.8bn in July. This was also the highest figure since November 2022, when this reached £3.3bn.
The annual growth rate for net mortgage lending rose to 0.6%, up from 0.5% the month before.
Average mortgage rates stay flat
The average interest rate on newly drawn mortgages was flat at 4.81% in July, while there was a four basis point rise on the rate of the outstanding stock of mortgages, which increased to 3.69%.