Home-buyer mortgage approvals jump to highest level since September 2022

The number of mortgage approvals made to home buyers jumped in March to the highest level since September 2022, according to Bank of England figures.

In an indication of property sales to come, mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March.

It was the highest total since more than 65,300 mortgages for house purchase got the green light in September 2022.

Approvals for remortgaging decreased from 37,700 to 34,200 over the same period, according to the Bank of England’s Money and Credit report.

The report was released as HM Revenue & Customs (HMRC) figures showed that home sales across the UK increased for the third month in a row in March.

Some 84,200 home sales took place in March, which was 6% lower than March 2023 but 1% higher than February 2024.

In the financial year 2023-24, around 999,460 home sales took place – marking the lowest level of residential transactions since financial year 2012-13.

Home sales in 2023-24 fell by 17% compared with 2022-23, when 1,208,310 transactions took place.

Colby Short, co-founder and chief executive of GetAgent.co.uk, said: “Despite mortgage rates remaining far higher than in recent years, the stability that has come due to a static base rate has allowed buyers to act with greater confidence.”

Emily Williams, director of research at estate agent Savills, said: “We expect the market to continue to be somewhat stop-start until the Bank of England can definitively signal the end of the battle to control inflation through a cut to the base rate.”

Karim Haji, global and UK head of financial services at KPMG, said: “Recent increases in mortgage approvals for house purchases could be curtailed if the Bank delays its decision to cut rates.

“Ultimately, this data release poses some questions for the (Bank of England) Monetary Policy Committee. In the past month, markets have begun to revise their expectations for (first half of the year) interest rate cuts, with a drop below the current 5.25% now not expected until late summer at the absolute earliest.

“The Bank may very well look to these figures, and stubborn inflation, as indication that it must stay the course a little longer – much to the likely displeasure of borrowers.”

Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “The Bank of England’s next announcement on interest rates is eagerly awaited and we now hope the next phase of reducing borrowing rates will help better the affordability of prospective or current homeowners happens soon.”

Sarah Coles, head of personal finance, Hargreaves Lansdown, said: “Rate cuts will come eventually. They’re currently being pencilled in to start in August or even September, although June still can’t be ruled out.

“Two or three cuts are expected to kick in during 2024. This will finally bring lower monthly payments for those who switched to variable deals, and will mean slightly lower rates for those looking for a new fixed rate.

“However, it’s a far cry from earlier in the year when markets were expecting rates to have been cut already – and for anything up to five cuts during the year. It means mortgage deals may not move as far or as fast as buyers were hoping.”

Tom Bill, head of UK residential research at Knight Frank, said: “A wave of owners rolling off sub-2% mortgages agreed in early 2022 is adding to the financial pressures in the system.

“Demand will strengthen as more sub-4% mortgages reappear, which will only happen when services inflation heads closer to the Bank of England’s 2% target, which means there should be a more obvious seasonal bounce in activity this autumn.”

Nick Leeming, chairman of estate agent Jackson-Stops, said: “Across Jackson-Stops’ own national network in March, we saw a positive uptick in new instructions, supporting the view that that market is paving the way for a more active summer. This is reflected in mortgage approvals being significantly up from last year, starting to make a long-awaited return to pre-pandemic levels.”

Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said: “Our offices are the busiest they have been all year, mainly with family homes coming to market and a significant uplift in viewings.”

Iain McKenzie, chief executive of the Guild of Property Professionals, said: “Buyers have adjusted their expectations in line with the changes in their affordability, but sellers are also much more open to negotiate, helping to get more sales over the line.

“This improving economic outlook has also been encouraging more first-time buyers who were previously hesitant or struggling to enter the market due to higher mortgage rates.”

The Bank of England figures also showed that the annual growth rate for consumer credit, which includes credit cards, personal loans and overdrafts, remained unchanged in March compared with February, at 8.8%.

Households also deposited an additional £8.5 billion with banks and building societies in March, marking the highest net inflow since October 2022.

Meanwhile, UK non-financial businesses made total net repayments of £1.1 billion of loans from banks and building societies, including overdrafts, compared with £2.8 billion of net repayments in February.

Debt help charity StepChange’s chief client officer Richard Lane said: “It’s encouraging to see rising mortgage approvals and increased use of credit, which in part will reflect growing consumer confidence.

“However, for many others, the increased use of consumer borrowing may reflect more difficult circumstances, with our recent polling estimating that one in six people – 8.6 million UK adults – has recently borrowed to keep up with essentials.”