Net mortgage approvals for house purchases increased by 700 to 65,600 in September, the highest level since August 2022 (72,000).
Net borrowing of mortgage debt by individuals fell by £0.3 billion to £2.5 billion in September, following three consecutive monthly increases.
Jeremy Leaf, north London estate agent and a former RICs residential chairman, says: “Mortgage approvals always set the direction of travel for market activity over the next quarter at least. “These latest numbers show that momentum over the past few months has been sustained and we are looking forward to an upward trajectory into early 2025.
“We have noticed in our offices too buyers are shrugging off concerns about what may be a ‘painful’ Budget and consequences for affordability while taking advantage of rising incomes and anticipating lower mortgage rates.”
MARKET HAS FOUND ITS FEET
Colby Short, Co-founder and Chief Executive of GetAgent.co.uk,says: “Mortgage approvals have sat consistently above the 60,0000 threshold now since February of this year and this very much demonstrates a market that has found its feet following what was a very difficult period for the mortgage sector and the nation’s homebuyers.
“With another interest rate cut, at least, expected before the year is out, we’re likely to see more homebuyers entering the market ahead of the Christmas break, in preparation of hitting the ground running in 2025.”
HIGHEST IN TWO YEARS
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, says: “UK net mortgage approvals edged up in September – the highest level in more than two years – after the interest rate cut at the start of August lured more buyers back to the market and fears around a hike in the rate of Capital Gains Tax on property sales spurred second homeowners and buy-to-let landlords to sell up.
“Despite the surge in buyers and new listings energising the residential property market, net mortgage lending eased in September, which may reflect the high number of transactions carried out by first-time buyers who are likely to be purchasing smaller homes.”
“Lower inflation, improving borrowing conditions and robust income growth have eased the affordability challenge for many buyers.”
She adds: “Lower inflation, improving borrowing conditions and robust income growth have eased the affordability challenge for many buyers in recent weeks following the Bank of England’s decision to make its first interest rate cut since the start of the pandemic.
“The prospect of at least one more rate reduction this year – with the first expected early next month – is likely to catalyse the property sector even more though buyers, sellers, second homeowners and buy-to-let landlords are now on tenterhooks as they wait to see what Chancellor Rachel Reeves will deliver in her Budget on Wednesday.”
ROBUST MORTGAGE ACTIVITY
Stephanie Daley, Director of Partnerships at mortgage adviser, Alexander Hall, says: “Despite the air of uncertainty caused by the looming Autumn Statement, the UK property market has continued to benefit from a robust level of mortgage market activity, recording a fourth consecutive month of positive growth where approvals are concerned.”
She adds: “This momentum is only likely to build further once the dust has settled on tomorrow’s Budget, as both buyers and lenders will have a clearer view of where they stand within the market.
“The outlook remains a very positive one for the remainder of the year and we expect that the mortgage sector will continue to act as the catalyst that drives the recovery of the wider market forward as we head towards 2025.”
Jonathan Samuels, Chief Executive of specialist lender Octane Capital, adds: “Mortgage approvals are the fuel that drives the wider machine of the UK property market and, as it stands, it’s benefitting from a full tank, having been running on empty for much of the last two years.
“Buyers are returning with confidence and whilst they may pause for breath ahead of tomorrow’s Autumn Statement, we expect to see 2024 finish on the front foot.”
