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Bank of England mortgage approvals April 24: "Hopes of lower rates may explain the plateau in mortgage approvals for house purchase"

ended 31. May 2024

The Bank of England this morning published its Money & Credit report (April 2024), showing net mortgage approvals for house purchases were 61,100 in April, little changed from 61,300 in March. Meanwhile, net approvals for remortgaging decreased to 29,900 from 33,500 over the same period. Newspage asked brokers for their views, below.

5 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Enquiries for mortgages remained strong in April and May, but with home buyers and movers anticipating lower rates in the not too distant future, many are putting that actual house purchase on hold. Hopes of lower rates may explain the plateau in mortgage approvals for house purchase. We have seen a much larger proportion of business coming from remortgages in recent months. Despite inflation coming down and edging ever closer to the 2% target, the latest fall was less than expected, so the mortgage rate reductions the market deperately needs never materialised. The ball is in the Bank of England's court to make the base rate cut that will get the UK property market moving again. Rishi Sunak's bizarre pledge this week that a vote for the Tories will bring lower rates must have boiled blood on Threadneedle Street.
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Justin Moy
Managing Director at EHF Mortgages
The mix of mortgage business these past few months has certainly changed, with much more focus on product transfers and remortgages than actual purchase applications. The reason is simple enough: buyers are finding it harder to afford what they need and sellers are still often proving stubborn on price. As this data from the Bank of England suggests, purchase activity has dropped off a bit. In April and May, lenders started to make purchase deals cheaper than equivalent remortgage options in a bid to stimulate the market over the summer, but the General Election has since poured cold water on that. We all sit and wait to see what the election will provide but there is no sign of cheaper mortgage rates on the horizon.
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Elliott Benson
Owner at Sett Mortgages
Here in Leeds, first-time buyers are firmly off the leash. During April and May, over 75% of enquiries we've received have come from first-time buyers. We have seen a 10% increase in applications year-on-year and also noticed a few properties going well over asking price. The market here is still hot and demand has not dropped off. 2- and 3-year fixed rates are leading the charge and lender pricing is not really hitting demand as long as the monthly payment is comfortable. Buy-to-let is totally dead in the water as has been the case for a year.
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Craig Fish
Director at Lodestone Mortgages
Mortgage enquiries have been ambling along at a fairly consistent level, mainly coming from first-time buyers and home movers. But the enquiries are often not evolving beyond that stage due to the uncertainty around interest rates, specifically when the base rate will be cut. That's likely causing the no-change scenario in approvals for house purchase. There is still a particular interest in shorter term fixed rates on the back of expected rate cuts in the coming months. The question all borrowers are asking is will a change in government have a positive or negative impact on interet rates, especially following comments from Rishi Sunak suggesting that the Bank of England isn't as independent as they may have us believe.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
House purchase activity has been stagnant for a long while now, and that continued in April. This pattern now looks set to take a turn for the worse as the general election adds further uncertainty into the mix. If Labour win, as expected, sellers may think that prices will edge up towards the end of the year and hold off listing until then, drying up an already quiet market.