Mortgage approvals at three-month high

Bank of England

Mortgage approvals rose at a greater rate than economists expected in October, signalling that the UK may be turning a corner in terms of housing activity.

There were 47,400 approvals in October, exceeding economists’ expectations of 45,000, Bank of England data shows.

This is the best result since July, though it’s still 28% below pre-pandemic levels.

Jonathan Samuels, CEO of Octane Capital, said: “With mortgage rate hikes stabilising, it was only a matter of time before mortgage approvals followed suit and today’s increase marks the end of the decline seen since June 2023.

“Hopes of market boost in the form of a stamp duty saving failed to materialise in last week’s Autumn Statement and so it’s likely that mortgage market activity will remain somewhat subdued until the new year. However, while many homebuyers may put their plans to purchase on hold until the Christmas period is over, it’s clear that our appetite for homeownership remains.

“For those with the ambition to tackle the market during the festive period, there remains a wealth of opportunity. Working with a specialist broker will enable you to access the very best rates while doing so and give you a head start when it comes to transacting in the new year.”

The Bank of England base rate has stayed at 5.25% since August, which is improving the confidence of mortgage lenders to get more competitive on rate.

Bank statistics say typical 2-year fixed rates at 60% loan-to-value have fallen from 6.2% in July to 5.5% in October.

Jason Ferrando, founder and CEO of easyMoney, said: “We’ve seen an air of stability return to the market following two consecutive decisions to hold the base at 5.25% and this has helped boost buyer sentiment, with mortgage approvals hitting their highest levels since July of this year, reversing the previous downward trend in the process.

“With the Christmas period fast approaching, we can expect to see the usual seasonal lull materialise over the coming months. However, it’s clear that the number of motivated buyers entering the fray is on the up and this puts the market in a great position for 2024.”