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Bank of England mortgage approvals May 24: "first base rate reduction in August has the potential to turn the property market up to eleven"

ended 01. July 2024

The Bank of England this morning published its May Money & Credit report, showing net mortgage approvals for house purchases fell from 60,800 in April to 60,000 in May, while approvals for remortgaging decreased slightly from 29,900 to 29,600 over the same period. Newspage asked brokers for their thoughts, below.

10 responses from the Newspage community

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Ken JamesVerified
Director at Contractor Mortgage Services
The pressure for a base rate reduction is hotting up, but like the weather it is difficult to say if we should be wearing T-shirts or jumpers. Each day we hear conflicting stories of how the market may react. One thing is certain: if we want to have a reinvigrated mortgage market then an injection of good news is needed and what could be better than a base rate reduction? Let's keep our sunscreen handy and hope for a scorchio announcement from the Bank of England in August.
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Craig FishVerified
Director at Lodestone Mortgages
We've seen a noticeable pick-up in enquiries from first-time buyers in particular in May and June, but the General Election and the Euros do seem to have paused the number of applications. The impending base rate cut is filling borrowers with hope and if, as expected, it does become a reality, the second half of 2024 should be a very busy one.
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
There may have been a slight dip in mortgage approvals in May but overall there was a consistent flow in enquiries, despite General Election distractions towards the end of the month. That trend continued into June. The consensus among buyers is that market conditions won’t be massively affected whoever is in charge on 5th July. The anticipated first base rate reduction in August has the potential to turn the property market up to eleven.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
May's mortgage activity was lacklustre, but June saw significant improvement. While there was initial uncertainty around the election, this concern seems to have subsided. Remortgage activity continues to dominate, but purchase activity is now rebounding, indicating renewed optimism. With a likely Bank of England base rate cut in August, we expect a strong surge in the property market in the second half of 2024, with property prices climbing as demand picks up.
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Harps GarchaVerified
Director at Brooklyns Financial
May was definitely a little meh, but in June activity levels really started to pick up. There has been a surge in applications and enquiries from both homeowners and landlords over the past couple of weeks. As lenders have cut rates, confidence has started to return. All eyes are now on Thursday's General Election result, which will play a huge role in what happens next. Everyone's waiting to see when the Bank of England will make its move, but it looks like they'll hold off until they're sure inflation in the service sector is under control. So, the big question is: what will Thursday reveal?
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
The uncertainty of the General Election has slowed an already glacial property and mortgage market, which may be reflected in the marginal drop in approvals in May. Until there is a new government, buyers will sit on their hands. The expectation is new buyer schemes may be introduced and that there could be a bounce in prices with the confidence a new government brings.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
Demand for mortgages is steady, maybe even a bit higher than in previous months. The election might make some people hold off, waiting for the outcome and hoping rates will go down, though I don't think that's likely. The buy-to-let market has seen a significant drop in demand, and first-time buyers might also be holding off, waiting to see what happens next. I don't expect the second half of the year to bring a significant increase in activity; we’re dealing with a volatile market. The busiest areas in May and June were remortgages and fixed-rate deals as people look to lock in before any potential rate hikes. Overall, it's a wait-and-see scenario for many borrowers.
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Simon BridglandVerified
Director at Charwin Private Clients
This slight reduction in approvals simply reflects the difficulty borrowers have been under during this period, due to the complete lack of empathy shown by the Monetary Policy Committee, by not throwing a lifeline to borrowers and reducing interest rates. The next report should show an increase, albeit marginal, as the recent reductions in swap rates which have translated into lower fixed interest rates for borrowers, feeds through into more activity for June.
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Justin MoyVerified
Managing Director at EHF Mortgages
A combination of improved weather and better mortgage rates has certainly seen activity increase over the past fortnight, even with the impending change of government potentially casting a dark cloud over the economy. Most borrowers are not expecting much change over the coming months, so it feels like business as usual. We are all still treading water until that all-important first base rate cut.
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Graham CoxVerified
Director at Bridging Hub
There's no doubt the housing market has been sluggish over the past few months. Mortgage rates have been creeping up since February, reducing demand. Prospective buyers are sitting tight in the expectation of base rate cuts. The good news is lenders have already started lowering mortgage rates in anticipation of the Bank of England lowering the base rate on August 1st.