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Bank of England mortgage approvals - January 2024

ended 29. February 2024

The Bank of England has just published the latest mortgage approvals data (full report >> here <<). It showed individuals repaid, on net, £1.1 billion of mortgage debt in January compared to £0.9 billion in December, and that net mortgage approvals for house purchases rose from 51,500 in December to 55,200 in January. Net approvals for remortgaging remained stable at 30,900 in January. The report also revealed that the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 9 basis points, to 5.19% in January. Meanwhile, net borrowing of consumer credit by individuals rose to £1.9 billion in January, from £1.3 billion in December. Newspage asked brokers for their views, below.

12 responses from the Newspage community

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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
The improvement in January relative to December reflects the growing confidence in the market as mortgage rates started dropping in the fourth quarter of last year. We may see a further uptick in the next set of data. Sentiment has taken a bit of a hit in recent weeks but it's still far stronger than it was in 2023.
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Rohit KohliVerified
Director at The Mortgage Stop
These figures relfect what we often see, namely an uptick in people loking to move post-Christmas. That seasonal surge was helped by the mini-rate war that ensued through the tail end of 2023 and into January 2024. However, since then rates have gone up a little and it's caused some people to pause as doubt sets in over the stability of this recovery. The next couple of weeks are going to be significant for the Chancellor, property market and wider economy.
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Hannah BashfordVerified
Director at Model Financial Solutions
This reflects what we’re seeing when advising borrowers. Those lucky enough to have savings are using those to pay off their mortgage to mitigate the higher interest rates and monthly payment increases but on the flip side we’re also seeing more people with short term debt. The decrease in the actual interest paid is great news and let’s hope that the small mortgage rate increases we have been seeing recently will be counteracted by decreases again soon.
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Robert Timm0
Managing Director at Sunland Mortgages
I think for anyone involved in mortgages on a day-to-day basis, these results will be no surprise. Seasonally, there is usually an uptake in mortgage approvals post-Christmas anyway, but this year it was even greater due to the mini price-war between lenders. The frustrating thing is, this already feels like a lifetime ago, and the trend has almost certainly reversed.
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Graham CoxVerified
Director at Bridging Hub
The biggest takeaway from the Bank of England's report is that for the first time ever since these figures were collated in 1994, net mortgage lending was negative (-0.2%) on an annualised basis. This demonstrates just how much skyrocketing mortgage rates have suffocated buyer demand. Existing borrowers are now paying back more mortgage debt annually than lenders are issuing in new mortgage loans. Quite something.
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Darryl DhofferVerified
Founder at The Mortgage Geezer
This data confirms that January, with a lower interest rate market then we are seeing today, spurred the market on. As rates go down, so approvals go up. There was an appetite out there from borrowers in January that we hadn't seen for some time. However, this can easily be muted when there are sudden spikes in lenders rates as we have seen of late.
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Justin MoyVerified
Managing Director at EHF Mortgages
For those who can afford to, mortgage debt is being repaid quicker than normal to mitigate the extra cost of higher rates, but many are increasing their debt through loans and credit cards just to pay the basic costs of living. The routine of remortgaging to repay debt every few years has come to a halt, as borrowers scramble to keep a lid on mortgage payments. We have plenty of financial pain to go through still before we will see improvement.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
The jump in consumer credit is concerning as many are using plastic to supplement their monthly expenditure. However, that debt still has to be repaid and with the cost of living crisis, this is a worry. All eyes are now on the Budget to see what lifelines are going to be provided. I am not holding my breath.
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Harps GarchaVerified
Director at Brooklyns Financial
The latest report from the Bank of England mirrors the uptick in activity witnessed on the ground, starting from mid-December and extending into January. This surge can be attributed to a competitive environment among lenders, sparking increased demand from borrowers. Mortgage holders on lower rates with surplus income are opting to make additional payments. This strategic move aims to cushion the potential shock when their current rates expire.
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Gary Bush0
Financial Adviser at MortgageShop.com
Crikey, the Bank of England data just released is head wobbling. The population are paying down their mortgages and yet other debt is increasing. The mortgage approvals data just confirms what we have been saying since the new year started, namely 2024 kicked off nicely and consumers are correctly seeking the advice of financial advisers to help them navigate the minefield that is the fixed rate mortgage market. It's game on for the mortgage rate war that has been raging - in the next 2 weeks, we expect some strategic action from lenders.
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Matthew JacksonVerified
Director at Mint FS
Intersting figures against a background of fluctuating mortgage rates and dubious notice periods from lenders. These show the resilience of the mortgage industry and specifically the ability of brokers to work against a tough economic backdrop.
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Akhil Mair0
Director at Our Mortgage Broker
The sustained growth underscores increased confidence among homebuyers and signals opportunities for market expansion and investment. The latest figures from the Bank of England reveal a positive trend in mortgage approvals for January, with 55,227 approvals, up 7.2% from December and 40.2% from January 2023. This marks the fourth consecutive monthly increase, reaching the highest level since June 2023.