Home Estate Planning Mortgage approvals hit six month high in fresh boost for house buyers

Mortgage approvals hit six month high in fresh boost for house buyers

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Mortgage approvals rose again last month and climbed to the highest level in six months, in the latest signal that lower borrowing costs are helping aid recovery in the property market. 

New figures from the Bank of England show the number of buyers receiving a green light grew from 49,300 in November to 50,500 in December.

This is up again from 47,900 recorded in October. 

Net approvals for remortgaging also increased from 25,700 in November to 30,800 in December.

Today’s figures come as January has shown housing affordability is beginning to show signs of improvement after a difficult year. 

According to Zoopla’s latest HPI housing inflation edged down 0.8 per cent in January. 

This coupled with an ongoing mortgage price war has improved buyer sentiment. 

Last week Nationwide slashed some of its rates by as much as 0.81 per cent and rival Barclays cut its rates by as much as 0.6 per cent.

The Bank of England raised interest rates 14 times to help curb soaring inflation, leading lenders to raise the cost of their mortgage deals, cooling demand and levelling off house prices growth.

While they have fallen since, an average two-year fixed residential mortgage rate today is 5.56 per cent, marking a significant fall from its July peak of over six per cent. 

Akhil Mair, director at London-based broker, Our Mortgage Broker, said: “The surge in mortgage enquiries and subsequent applications since early December has been truly remarkable. 

“There’s been a dynamic blend of first-time buyers eagerly stepping onto the ladder and seasoned home movers seeking new horizons. We’ve also seen lots of astute investors strategically acquiring property using bridging loans.”

He added: “December was bustling with activity, as lenders slashed rates and sentiment among buyers rose sharply. January has carried forward this momentum, with demand for property showing promising signs of acceleration as lenders raced out of the blocks. 2024 has got off to a flying start.”

Tomer Aboody, director of property lender MT Finance, also said there are signs that the Bank of England’s monetary policy is “having the desired effect”. 

“While inflation is increasingly under control and nearing the Bank’s two per cent target, it looks as though we are heading into a period of nominal to flat growth, requiring some government stimulus for the economy in early 2024, perhaps in the Budget.

“A rate reduction this year, in order to support and encourage growth and investment, would be extremely welcome.”

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