Mortgage approvals begin to rebound amid subdued lending: BoE

Net mortgage approvals for house purchases rose from 43,700 in September to 47,400 in October, the latest Money and Credit statistics from the Bank of England show.

Net approvals for remortgaging with a different lender increased from 20,600 in September to 23,700 in October.

Individuals repaid, on net, £0.1 billion of mortgage debt in October compared to £1.0 billion of net repayments in September. Gross lending fell from £18.1 billion to £16.2 billion and gross repayments decreased from £19.5 billion to £17.2 billion over the same period.

The ‘effective’ interest rate paid on newly drawn mortgages saw a 24 basis point increase and now sits at 5.25%.

Reece Beddall, sales and marketing director at Bluestone Mortgages, commented: “Following last month's decline, which marked the lowest level since January 2023, today's data paints a more optimistic picture for the mortgage market. With inflation edging downwards and consumer confidence on the rise, combined with last week’s announcements in the Autumn Statement aimed at borrowers with smaller deposits, there's a growing sense of hope on the horizon."

CEO of Octane Capital, Jonathan Samuels, said: "With mortgage rate hikes stabilising, it was only a matter of time before mortgage approvals followed suit and today’s increase marks the end of the decline seen since June 2023.

"Hopes of market boost in the form of a stamp duty saving failed to materialise in last week’s Autumn Statement and so it’s likely that mortgage market activity will remain somewhat subdued until the new year. However, while many homebuyers may put their plans to purchase on hold until the Christmas period is over, it’s clear that our appetite for homeownership remains."