Uptick in mortgage approvals
July data just released by the Bank of England saw a pick-up in mortgage approvals to just shy of 62,000, the highest monthly rate since the Liz Truss mini budget in September 2022.
This July mortgage data precedes the Bank of England’s first interest rate cut in August but shows the building sentiment towards the housing market as mortgage rates moved down ahead of the Bank of England meeting.
With mortgage rates moving lower again since, mortgage approval volumes should strengthen further over the next few months which in turn will feed into higher transaction numbers. Source: Dataloft by PriceHubble, Bank of England (https://www.bankofengland.co.uk/).
So there was a 62% increase in mortgage approvals compared with July 1923. What does that mean in the big scheme of things?
Mortgage approvals in the last year.
You can see the massive uptick in mortgage approvals in the last 12 months. 2024 in particular, has seen virtually month on month increases. At the end of 2023 there were 52,150 mortgage approvals. 2024 has seen the following firgures:
Jan 2024 55,970
Feb 2024 60,290
Mar 2024 61,080
Apr 2024 61,180
May 2024 60,501
Jun 2024 60,611
Jul 2024 61,985
How do these figures stack up against previous years?
Mortgage approvals over the last 5 years.
The last 5 years mortgage approvals graph above shows that from the heady heights of November 2020 where there were 108,010 approvals there was a steady decline for a couple of years as increased mortgage rates & inflation bit hard. Since then, the picture has continued to improve gradually.
Conclusion
Inflation seems to be stable around 2%. All the talk is of another cut in the Bank of England base rate to 4.75% in a couple of months.
If these two things happen then we can expect mortgage rates to drop further and that will feed into the amount of buyers in the market.