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Bank of England: Mortgage approvals rose to 65,600 in September - highest level since August 2022

ended 29. October 2024

Mortgage approvals for house purchases rose to 65,600 in September, the highest level since August 2022 (72,000), according to Bank of England data published this morning. Similarly, approvals for remortgaging increased by 3,100 to 30,800.

Net borrowing of mortgage debt by individuals fell by £0.3 billion, to £2.5 billion in September. Meanwhile, the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 8 basis points last month, to 4.76%.

Brokers said the momentum from the lower mortgage rates that became available during the summer continued into September and was a key driver of the strength in demand. 

According to Daniel Hobbs, Managing Director at New Leaf Distribution: “The last time mortgage approvals were this high was before the catastrophic mini-Budget of 2022. As rates have come down, demand has picked up but clearly we have a huge potential hurdle in the Budget to clear. Let's hope this doesn't have the same effect on the economy as Trussonomics did.”

It was a sentiment echoed by Emma Jones, Managing Director at Whenthebanksaysno.co.uk: “Demand was strong throughout the summer and into September. There has been a feel-good factor around the property market in recent months as borrowing has become cheaper. The hope is that tomorrow's Budget does not end it abruptly.”

Stephen Perkins, Managing Director at Yellow Brick Mortgages, added: “Demand picked up during the summer months as rates fell and that momentum continued into September and throughout October, despite the slight uptick in rates. Right now, though, it feels like the entire country is holding its breath and hoping to avoid a Truss-style catastrophe in the Budget. Once the Budget is behind us and the near inevitable base rate reduction in early November comes, it should be a strong end to the year, which will fuel a more resurgent property market during 2025.”

Andrew Montlake, Managing Director at Coreco, said the return to school also played a role in driving up approvals but warned that the rhetoric from the Government ahead of the Budget is not helping confidence: “August was strong enough in itself but as the kids went back to school borrowers came out to play, with demand rising noticeably in September. There has been some turbulence in rates in recent weeks as markets have priced in uncertainty around the Budget and some prospective borrowers have put making decisions on hold as they're just not sure what state their finances will be in after it. The language coming out of Numbers 10 and 11 is not generating confidence. In fact, it's doing the polar opposite. But fingers crossed we get through this week and move onto another rate cut in November, which could see demand really take off.”

Ranald Mitchell, Director at Charwin Mortgages, said fiscal policies announced on Wednesday will determine the market's direction in the months ahead: “Mortgage approvals climbing to 65,600 in September marks a significant boost, largely driven by the lower rates that came into play over the summer. This momentum has strengthened demand, with both purchase and remortgage approvals seeing healthy increases. While this positive trend is expected to carry into the year’s end, much rests on the upcoming Budget and the Chancellor’s approach to fiscal policy."

The Bank of England also revealed that net consumer credit borrowing by individuals was £1.2 billion in September, down from £1.4 billion in the previous month.

7 responses from the Newspage community

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Simon Bridgland
Director at Charwin Private Clients
September’s data was as expected by those at the coal face. For us, this strength has continued throughout October and, on speaking to peers, has also shown itself in the wider market. That said, this week’s Budget has perhaps caused a pregnant pause on what could have been a very busy end to the year. Hopefully the worst has already been leaked in the press and that, after this week, we can get on with the job in hand and stop worrying. I feel there is still further expansion in the numbers for the remainder of 2024 given the likelihood of a rate drop in November which could even see another to follow in December. That would be a very Merry Christmas to one and all.
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Daniel Hobbs
Managing Director at New Leaf Distribution
The last time mortgage approvals were this high was before the catastrophic mini-Budget of 2022. As rates have come down, demand has picked up but clearly we have a huge potential hurdle in the Budget to clear. Let's hope this doesn't have the same effect on the economy as Trussonomics did.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Demand picked up during the summer months as rates fell and that momentum continued into September and throughout October, despite the slight uptick in rates. Right now, though, it feels like the entire country is holding its breath and hoping to avoid a Truss-style catastrophe in the Budget. Once the Budget is behind us and the near inevitable base rate reduction in early November comes, it should be a strong end to the year, which will fuel a more resurgent property market during 2025.
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Andrew Montlake
Managing Director at Coreco
August was strong enough in itself but as the kids went back to school borrowers came out to play, with demand rising noticeably in September. There has been some turbulence in rates in recent weeks as markets have priced in uncertainty around the Budget and some prospective borrowers have put making decisions on hold as they're just not sure what state their finances will be in after it. The language coming out of Numbers 10 and 11 is not generating confidence. In fact, it's doing the polar opposite. But fingers crossed we get through this week and move onto another rate cut in November, which could see demand really take off.
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Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Demand was strong throughout the summer and into September. There has been a feel-good factor around the property market in recent months as borrowing has become cheaper. The hope is that tomorrow's Budget does not end it abruptly.
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Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Mortgage approvals climbing to 65,600 in September marks a significant boost, largely driven by the lower rates that came into play over the summer. This momentum has strengthened demand, with both purchase and remortgage approvals seeing healthy increases. While this positive trend is expected to carry into the year’s end, much rests on the upcoming Budget and the Chancellor’s approach to fiscal policy. A November base rate cut could be instrumental in maintaining this growth, helping counter any potential Budget constraints and paving the way for continued stability in 2025.
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Dennigan Tyson
Mortgage & Protection Adviser at Pia Financial Solutions
Demand has been relatively steady overall, but I think there has also been an element of borrowers getting things sorted with the mixed messages about the looming Budget this week. I would be surprised if there isn't a base rate cut on 7 November, but I think they will be watching with a close eye on Thursday to see what Rachel and Keir deliver and their fiscal policy plans. First-time buyers are slow, but I think it's normal at this time of year, but the main increase is individuals seeking advice 6 months prior to their mortgage renewal. I would like to see the SDLT rules to continue as they are, as I think this helps not only first-time buyers, but also those moving onto their next home as well. I don't want to see a repeat of Liz or any policies of that nature.