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Bank of England mortgage approvals up in February amid "strong demand from first-time buyers"

ended 02. April 2024

This morning, the Bank of England published its February Money & Credit report. It showed net mortgage approvals for house purchases rose from 56,100 in January to 60,400 in February, and that net approvals for remortgaging also increased, from 30,900 to 37,700 during this period. It added that individuals borrowed, on net, £1.5 billion of mortgage debt in February, compared to £1.1 billion of net repayments in January. Newspage asked brokers for their views, below.

16 responses from the Newspage community

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Shaun SturgessVerified
Director at Sturgess Mortgage Solutions
After the manic mini-rate war of January, swaps went up and mortgage rates rose with them, but approvals edged higher again in February showing that demand is still strong. Despite the mixed messages emerging from lenders, and many lenders making rate changes without rhyme or reason, we have seen strong demand from first-time buyers in particular and that's likely driving this data. That's especially the case here in South Wales. First-time buyers are now starting to look past interest rates and focus on monthly payments, and for the majority a mortgage is still far cheaper than renting. A rate cut from the Bank of England, when it comes, should kickstart competition between lenders and once again fuel confidence in the property market.
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Harps GarchaVerified
Director at Brooklyns Financial
Mortgage activity has seen a considerable rise compared to 2023, despite the mortgage pricing yo-yo between January and March. First-time buyers and professional buy-to-let investors are leading the charge. While lenders have been proactive in providing support through rate reductions and policy innovations in recent weeks, all eyes are now on the Bank of England to initiate the much-awaited rate reduction, which could really boost demand for mortgages.
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Katy EatentonVerified
Mortgage & Protection Specialist at Eatenton Finance
January was the busiest month in the mortgage market since before the mini-Budget debacle and, based on this evidence, the renewed confidence continued into February. The trigger in the rise in mortgage approvals for house purchase was the rate war between lenders at the very start of the year. Once rates started creeping up, the mortgage market started to slow down a little and the March data from the Bank of England may reflect this.
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Darryl DhofferVerified
Founder at The Mortgage Geezer
After the January surge, I was expecting mortgage approvals in February to be muted due to increased mortgage rates and pricing volatility. However, first-time buyers have been notably active and I expect this to continue as we enter the second quarter of 2024. For momentum to continue, we need to see inflation fall again, which will enable Threadneedle street to lower interest rates. When that first cut comes, all bets are off.
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Ken JamesVerified
Director at Contractor Mortgage Services
In our experience, January's highs morphed into February blues so this data is a bit of a curveball. After a strong start to the year caused by the rate war, we saw a definite reduction in enquiries during February as mortgage rates increased, which wasn't helped by lenders hiking rates at extremely short notice. Things picked up again in March and we could see mortgage approvals skyrocket if a cut to the base rate comes by the summer. Despite its turbulent start, 2024 is shaping up to be a better year than 2023.
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
After a significant wave of positivity in the first few weeks of the year as a fierce rate war raged between lenders, there was a lot of ebb and flow to mortgage enquiries during February and the rest of the first quarter. Though February saw a swell in mortgage approvals compared to January, the market eagerly awaits a Base Rate reduction, likely in June. This could be the catalyst to create a tsunami of mortgage demand.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
February saw a nudge up in mortgage demand, nothing to write home about but a bit more bustling than January's mini-rate skirmish. The market's been like the British weather – unpredictable with rates changing faster than you can say "Bob's your uncle." It hasn't exactly calmed down since the New Year's fireworks; we've been on our toes with a decently lively Q1. As for the movers and shakers, it's been a mixed bag with first-time buyers, downsizers, and upsizers all jostling in the market. Looking forward, with an election on the horizon and housing possibly climbing up the political ladder, we might just see some ambitious plans aimed at helping more first-timers get their foot in the door. The market's got its eyes peeled for any moves on inflation and interest rates – either could give demand a proper boost.
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Rohit KohliVerified
Director at The Mortgage Stop
With people's pay packets still feeling light and increases in interest rates in reaction to unexpected inflation in February it took some buyers by surprise but it didn't slow things down. I suspect we'll see transactions increase vs. 2023 and possibly flat against January but crucially we started seeing landlords start to return to the market the number of enquiries from these borrowers saw a notable increase and I think this is a positive sign that longer-term confidence is starting to return and if Threadneedle Street do reduce interest rates in the coming months we could see the property market heat up in the summer.
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Andrew MontlakeVerified
Managing Director at Coreco
Whilst we are miles away from easy street, compared to the austerity of last year we are definitely taking uncertain steps forward. We are hopefully standing on the precipice of a continued reduction in inflation and a stabilisation of interest rate movements, which will allow lenders to price more competitively and keep lower rates for longer, rather than the sharp staccato changes we have been seeing for too long now. The Bank of England needs to be brave and proactive rather than yet again putting itself into a position of having to be reactive later, with people all over the country being held to ransom under the weight of higher interest rates. There is a groundswell of pent-up demand from first-time buyers, movers and those wanting to remortgage, waiting for the levee to break so they can take advantage of softer prices before they strengthen once more.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
February was busier than the same month last year but not as busy as January when the rate war was in full flow. Activity in February was primarily due to more people needing advice for remortgages due to the movement in rates on offer. We have seen more high street lenders prepared to accept applications with some tolerance to a minor credit blip. The base rate needs to be cut by the Monetary Policy Committee, as the increase in mortgage payments simply isn’t sustainable for the long term. If the Bank of England doesn't cut soon to help homeowners, the fall-out could. be extreme.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
The UK mortgage and property market is as lost as Dorothy in Oz. Meanwhile, the wicked witch that is Threadneedle Street seems to be doing all it can to stop borrowers from finding their way home. We need a cut to the base rate, and soon, to ignite demand for mortgages and boost affordability via lower rates.
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Justin MoyVerified
Managing Director at EHF Mortgages
After the initial euphoria of rate reductions around the festive period, February saw activity slow down, with the diary space largely occupied by those refinancing rather than moving home. As we enter peak home buying season, this is not what anyone wanted to see. The increases in mortgage rates that rained on the market in February put out the January fire. March has seen a further slowdown as buyers look for divine inspiration in an otherwise lukewarm market.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
Demand for mortgages in February was stonger than expected following on from a blistering start to the year. Buyers have mobilised in numbers having had time to come to terms with current mortgage pricing, concerned that if they don't act now, property prices will surge away again, out of their reach. With an expected base rate cut just round the corner, this will only fuel the market further, restoring confidence and signalling the worst is over.
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Akhil Mair0
Director at Our Mortgage Broker
In February, demand for mortgages held strong, showing resilience despite the fluctuations in the market. We're seeing steady growth compared to January's active period, indicating a sustained interest in property ownership. The first quarter overall has been promising, with a blend of stability and growth in the mortgage market. Despite initial uncertainties, the sector has shown remarkable resilience, paving the way for a buoyant start to the year. Get ready for some interesting times ahead of the election. February and March saw a diverse mix of activity in the market, with various sectors making notable strides. First-time buyers, downsizers, and upsizers all played significant roles, contributing to a vibrant and dynamic property landscape. The path to boosting demand is paved with optimism and opportunity. While factors like an inflation drop or rate cut could certainly provide a boost, it's the collective confidence and stability in the market that will drive sustained growth.
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Hannah BashfordVerified
Director at Model Financial Solutions
February was a strong month, similar to January, mainly fuelled by the sub-4% rates borrowers were able to access and strong market sentiment. However, demand definitely started to slow down towards the end of February and into March as the low rates made available at the beginning of the year became a distant memory along with all those New Year resolutions. What has been surprising is the increase in people looking to move home. We have seen far more enquiries about affordability from people looking to purchase, not just remortgage or product transfer. A bit more positive movement in mortgage rates and I think we’ll have a strong second quarter.
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Ying TanVerified
CEO at Habito
Mortgage approvals in February were strong at Habito similar to January, and this is reflected in the Bank of England’s data. Consumers and homeowners took advantage of a rate war at the beginning of the year as lenders jostled for position. It has since steadied, however the combination of falling inflation and the expectation of base rate cuts should fuel demand, particularly from first-time buyers who are eager to get on the ladder.