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Bank of England mortgage approvals data

ended 29. June 2023

The latest Bank of England mortgage approvals data - for May - is being published tomorrow morning at 09:30. This gets widely picked up in the media so a handful of Qs:

  • How were mortgage approvals for house purchases for you in May - and during June to date?
  • Are you expecting mortgage approvals for house purchases to drop off in the months ahead as people sit tight and wait to see where rates go and if inflation drops?
  • How has remortgage activity shaped up over the past two months? Have rising rates and all the column inches given to it resulted in an influx of (worried) clients?
  • How is the second half of the year shaping up for you, as a mortgage broker? Do you expect things to be busier or quieter than in the first half of 2023?
  • Which types of borrowers are most active currently in your experience, e.g. FTBs, landlords, downsizers, home movers?
  • There is a lot of talk about a mortgage time bomb. How big could it be when people come off their ultra-low fixed rates?

Any other thoughts on the current state of the mortgage market, fire them across.

6 responses from the Newspage community

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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
House purchases remained steady in May but we have definitely seen signs of a slowdown in June. There may be seasonality in this but the more likely cause is consumer confidence being hit for six by all the base rate increases. First-time buyers will be worst affected as their confidence in timing is shaken but there are plenty of experienced landlords and cash investors out there ready to snap up the right opportunities. I expect a slowdown in new mortgage applications over the coming months, with first-timers and upsizers sitting tight and waiting to see what happens. Our view is that rates will peak at around 6.5% in April 2024, pushing high street mortgage rates into the high sixes or low sevens. Mortgages in 2024 will be unrecognisable from those in 2022. People who have time remaining on their ultra-low rates need to make lifestyle adjustments, as they know what is coming. Many will be looking at their RS Audi and thinking an Audi will now do. Unpleasant decisions lie ahead.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
Signs are emerging that the sluggish housing market experienced in other parts of the UK is now beginning to impact Scotland as well. Increased media coverage of rising interest rates and overall volatility in the mortgage market has naturally instilled hesitation and heightened concerns among prospective buyers. However, first-time buyers - apart from grappling with renewed affordability challenges - continue to be active and largely unfazed by negative sentiment or the challenges faced by existing homeowners remortgaging who are now facing significant jumps in their monthly payments. Landlords are battling with stress testing, elevated rates and burdensome regulations and this has resulted in a virtual obliteration of buy-to-let purchases. Hope for a relatively calm rate environment during the summer exists but the fate of the market for the remainder of 2023 largely depends on inflation exhibiting positive movement that is substantial enough to inspire confidence.
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Justin Moy
Managing Director at EHF Mortgages
Application numbers have been steady all year, but the mix of those we have helped has changed in June. Emphasis has been on refinancing or just reserving a new deal in advance of their current rate expiry. Around 75% of our applications have been for Product Transfers, with several anxious clients having to jump from rates below 1% to over 5%. There are plenty of buyers out there still, and for those moving within the local area we have seen prices reduced, but that reduction has been quite uniform so the trade-up gap between sale and purchase prices has remained similar to other years. Porting has been popular whilst clients look to utilise their longer-term deals on new purchases. There seems to be quite a sweet spot of low-rate expiries around the end of 2023 and into early 2024, so the current mix of Product Transfer and remortgage business I am sure will continue for a while yet. Buyers are waiting, not disappearing.
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Graham Cox
Director at Bridging Hub
As a business, May and June have seen steady levels of mortgage transactions. However, we've seen a marked slowing down in new buyer interest over the past couple of weeks, no doubt due to the worsening inflation and base rate forecasts.

Remortgage enquiries remain strong, as people look to secure a new deal before rates rise even further. For those who delay, or allow themselves to be moved onto the lender's SVR, the pain could be acute, potentially paying 3-4 times the interest rate they were on previously.

The next six months are likely to remain challenging, as prospective buyers wait for both house prices and interest rates to fall. The former is almost certain, the latter not so much.
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Austyn Johnson
Founder at Mortgages For Actors
I appreciate we cover a niche type of borrower, but for now we're still pretty active. I've made considerably more residential mortgage applications than buy-to-let this year, though, as investors are very wary at the moment. Personally, I've just remortgaged, from 1.56% to 5.89%. Not fun, but due to the previous stress testing, I can still afford it. I may, however, need to cut down on 'small pleasures', which is what I advise my clients to think about, too.
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Paul Welch
Founder and CEO at Largemortgageloans.com
Logically as mortgage rates rise and affordability hits, it's obvious that mortgage approvals will fall as fewer people can afford to buy. Even the rich and famous, are worried about interest rates and mortgage costs so it’s unimaginable for everyday people. For example, if you're an employee of a company you can't go out and earn an extra £10 or £20,000 a year. If you run the maths on a £500,000 mortgage and the rate goes from 2% to 6%, an increase of 4% per annum you would need to earn an extra £20,000 a year. How is that possible without getting second and even third jobs? It's horrendous.