Mortgage approvals a year in review.
- Mortgage approvals lead trends in residential sales activity by around 3 months. As such, mortgage approvals will be a key leading indicator to monitor for more signs of market activity over coming months.
- The number of approvals has risen since the beginning of 2023 but remains below usual levels. In the year to end July, approvals averaged 51,600 a month. This is 21% below levels recorded in the 7 years prior to the Covid pandemic.
- Whilst inflationary pressures certainly persist, recent inflation data has been encouraging. Interest rates are forecast to peak this year and start falling in 2024. Any pick-up in market activity will show first in mortgage approvals.
- Mortgage approvals were at their lowest in December 2022 and January 2023. In part a seasonal impact but largely a reaction to inflation and interest rate uncertainty. Source #Dataloft (https://dataloftinform.co.uk/), Bank of England.
What does Jukes Estate Agents think?
When looking at mortgage approvals a year in review, a few things stick out.
Firstly, there was a dramatic fall from August 2022 to January 2023.
Secondly, mortgage approvals have risen month on month 5 times out of 7 in 2023.
Thirdly, one of those 2 drops was in July and when August figures are released, it is almost certain that those figures will fall as well. The ‘summer holiday’ months nearly always see a drop.
Inflation is decreasing (albeit not that fast). Many economists predict the rises in interest rates maybe coming to an end. Therefore, the future is looking brighter.
Jukes Estate Agents Harlow work very closely with a couple of superb mortgage brokers. They keep Jukes up to date with many things that helps them keep ahead of the game.
“Mortgage rates have dropped 5 times in the last 4 weeks” says co owner Geoff Flewers. “We are keeping our fingers crossed that mortgage rates will drop significantly over the coming months”. “This will definitely lead to a rise in mortgage applications and therefore approvals will start to climb”.