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Bank of England mortgage approvals: "So much for the summer holidays slowing down mortgage demand."

ended 30. September 2024

Net mortgage approvals for house purchase rose from 62,500 in July to 64,900 in August, the highest level since August 2022 (72,000), according to the Bank of England. Similarly, approvals for remortgaging increased from 25,200 to 27,200 over the same period. Newspage asked brokers and lenders what they've seen on the ground. Their views are below.

11 responses from the Newspage community

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Adam Stiles
Managing Director at Helix Financial Partners
We saw a large uptick in activity in August, which corresponds with the latest numbers released by the Bank of England. A drop in the Bank of England base rate, drops in SWAP rates and therefore fixed rates, along with more positivity in the press, are all contributing factors to this surge in activity. The only worry on the horizon is just how harsh the Budget in October will be. Lots of people are trying to sell, or are trying to buy from motivated sellers who are worried about CGT changes.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
These latest figures from the Bank of England correlate with what we are seeing on the ground, which is a noticable increase in buyer activity, potentially encouraged by recent rate drops and the looming threat of the Autumn budget to come. Lenders certainly seem keen to fight over market share at present, making it an ideal time for borrowers to grab a competitive deal.
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Andrew Montlake
Managing Director at Coreco
So much for the summer holidays slowing down mortgage demand. Buyers slamdunked the mortgage market in August based on this data from the Bank of England, with lower mortgage rates contributing to increased demand. Many borrowers are also wary of the upcoming Budget and want to lock into rates now before a potentially turbulent period ahead. It's shaping up to be a busy end to 2024.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
August was the busiest month of the year so far, with September following closely behind. That comes through very clearly in this data and I expect next month's report to show mortgage approvals up again. Regular rate reductions from lenders are definitely helping drive demand and the rush to purchase before the rise in stamp duty is also a driver of activity. The only apple that could possibly topple the cart is the impending Budget at the end of the month. Everyone is praying there isn’t a repeat of the disastrous mini-Budget of 2022.
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Mark Eaton
COO at April Mortgages
Summers usually see a slowdown in mortgage demand but 2024 was the exception to the rule. First-time buyers came out in force in August and that's reflected in mortgage approvals for house purchase being at their highest level for two years. Lower mortgage rates at higher loan-to-values, more lenders providing greater loan to income multiples and the looming stamp duty cliff edge early next year are all stimulating demand among people aspiring to get onto the property ladder. In many cases, first-time buyers are snapping up the properties landlords are offloading. Clearly, next month’s autumn Budget is looming and could bring some uncertainty. The hope is that, from a property perspective, it is relatively benign and nothing is announced that interrupts the growing momentum in the market. For lenders, it is important not just to help borrowers buy their homes but manage their mortgage costs to keep their homes.
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Craig Fish
Director at Lodestone Mortgages
It comes as no surprise that we are seeing mortgage approvals increasing when interest rates are decreasing. There is a lot of pent-up demand in the market and, as rates reduce further, the approvals will continue their steady increase. This is likely to see an acceleration in the next few months as a result of the impending stamp duty changes. The only thing that could tamper with the revival is the looming Budget.
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Rohit Kohli
Director at The Mortgage Stop
With lenders taking a chainsaw to interest rates in recent months, it's no surprise to see mortgage approvals increasing and hitting a 2-year high. Many previously hesitant borrowers have decided to take advantage of more affordable borrowing before whatever horrors the government plans to unleash this Halloween.
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Simon Bridgland
Director at Charwin Private Clients
The uptick in mortgage approvals in August is a direct result of falling fixed rate mortgage products. The downward movement of 5-year fixed rates has lit up the market, and now 2-year money is becoming nearly as cheap. The borrowing public have had a tingle on their taste buds for some time now and so, with more property available, have happily sunk their teeth into their long-awaited plans, making them a reality. With this borrowing demand being met by more available housing stock, the fourth quarter of 2024 should see a continuation of this steady market. Only Rachel Reeves can cause a halt to things now. Let's see what the autumn Budget brings.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
The UK housing market is performing economic acrobatics as mortgage approvals soar to the highest level since August 2022. This favourable approvals data follows the very encouraging HPI figures from Nationwide showing the housing market recording its fastest growth in two years. This renaissance is largely attributed to the recent easing of monetary policy and the subsequent fall in mortgage rates, with a flurry of rate cuts as lenders vie for market share. However, the Autumn Budget could be the true wild card in the deck, potentially throwing a spanner in the monetary policy works should markets react unfavourably to fiscal policies perceived as inflationary or economically irresponsible. Despite the growing optimism about the economic outlook, this potentially uncertain horizon has left many borrowers wondering whether this is the calm before the storm or the dawn of a golden age.
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Kim McGinley
Director & Specialist Broker at VIBE Finance
August and September were like night and day for us. August was very quiet but September has been the busiest month in 2024 so far. Looking ahead to the fourth quarter, I think demand will stay strong, though I think we've all got one eye on the impending Budget coming at the end of October. Labour have done a grand job of preparing everyone for bad news. It’ll be interesting to see if anything in the market shifts, but for now, we’re full steam ahead and borrowers are keeping us busy.
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Iain Swatton
Director at Exemplar Financial Services
The latest data from the Bank of England is music to the ears of homebuyers and movers alike. Net mortgage approvals for house purchases jumped to 64,900 in August, up from 62,500 in July, marking the highest level since August 2022. Remortgaging approvals also got in on the action, climbing from 25,200 to 27,200. It looks like the property market is getting its mojo back – and just in time. What’s driving this upswing? The recent cuts in mortgage rates certainly help, and with demand on the rise, the timing couldn’t be better. Let’s not forget the latest Nationwide House Price Index showing a 3.2% year-on-year rise in house prices, with strong regional performance across the UK. The only thing growing faster might be the excitement among buyers. With rates falling and approvals increasing, the property market seems set to heat up again.