The number of mortgage approvals made to home buyers dipped in November, although it remained above the monthly average seen over the past year, according to Bank of England figures.
Some 65,700 mortgage approvals for house purchases were recorded in November. That’s some 2,400 lower than October but above the previous 12-month average of 60,400.
Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 300 to 31,200 in November but remained above the previous 12-month average of 30,000.
Agents and other property professionals have expressed surprise and disappointment.
Nathan Emerson, chief executive of Propertymark, says: “The impact of higher interest rates without doubt has had a profound impact across the housing market.
“Consumers need to feel a degree of confidence within their financial position to approach the buying and selling process, and it is essential that aspects such as inflation are managed robustly to keep long-term stability across the economy, which is needed for a healthy and secure housing market. Propertymark is keen to see interest rates lowered further when conditions permit to help spur growth in 2025.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, comments: “Mortgage approvals are arguably the most interesting piece of the housing market jigsaw. These numbers reflect direction of travel for the next few months at least and show that buyers paused for breath after the pre-Budget rush to possibly avoid higher taxes.
“However, it is probably a little early to assess whether there will be a more sustainable recovery until the impact of first-time buyers trying to take advantage of lower stamp duty rates ending in March form a lower proportion of the figures.
“Looking forward, we don’t expect too much change in pricing bearing in mind the number of new listings which became available in time for the traditional Boxing Day rush.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, sees it this way: “Mortgage approvals for new purchases slipped, which comes as a surprise and suggests ups and downs for the market in coming months rather than a steady improvement.
“Remortgaging numbers dipped very slightly, but this could mean more borrowers stuck with their existing mortgage providers rather than switching to a new lender.
“The effective interest rate paid on new mortgages decreased again to 4.5% as lower pricing at the time is reflected in the official figures. With a number of lenders cutting rates, this may dip further in coming months if others follow suit.”
Jason Tebb, president of number three portal OnTheMarket, adds: “Market stability and buyer confidence is steady rather than running away with itself. While affordability remains an issue for many buyers, the new year is off to a promising start with a couple of lenders reducing their mortgage rates.
“If others follow suit, this should encourage would-be buyers to take the plunge, making them more confident as to what they can commit to and can afford, particularly ahead of the stamp duty concession ending in March.”
