Mortgage approvals fall in September: BoE

A total of 43,300 house purchases were approved in September, down from 45,000 in August - and 20,600 remortgages were approved, the lowest level since January 1999.

The figures also showed that the interest rate on newly-drawn mortgages now sits at 5.01%, a 0.19% increase, and that net mortgage borrowing decreased its lowest level since April this year.

Kay Westgarth, sales director, Standard Life Home Finance, said:

“Although net mortgage approvals have slightly plateaued, the UK property market is still holding strong. Yes, activity has been slightly slower than usual for this time of the year, but the mood in the market is not one of frustration but of positivity. After fourteen consecutive base rate increases, interest rates are now settling into a more comfortable groove, which has surely boosted consumer confidence.

“Of course, it’s important to take a longer view when interpreting the property market’s behaviour. The market is opening up, but affordability and low supply will still pose a major hurdle to many buyers. Professional advisers are already providing a world-class service, but they must leverage sourcing tools and mortgage technology to help borrowers and existing homeowners enjoy satisfactory outcomes in a challenging time.”

Simon Webb, managing director of capital markets and finance at LiveMore, said:

“The sharp fall in net mortgage lending in September is in stark contrast to the previous four months where net lending increased. However, a fall was expected as mortgage approvals have been declining for the past three months as less people consider moving home. House prices are coming down and there is more housing stock on the market, but higher interest rates are putting people off during a cost-of-living crisis.

“Remortgaging to a different lender is down to its lowest figure in almost 25 years, which I suspect means product transfer numbers are higher. It is easier for borrowers to stay with their current lender as they do not have to go through the affordability assessment in the same way that a remortgage requires.”

Steve Seal, CEO, Bluestone Mortgages, commented:

“Following a sharp fall in consumer confidence, it’s no surprise that mortgage approvals have sunk as consumers continue to battle affordability challenges. However, with expectations for homebuyer and homeowner support in the upcoming Autumn Statement, this could signal that hope is on the horizon.

“For those worrying about how they can take their first or next steps onto the property ladder in the current inflationary environment, now is the time to speak with a mortgage broker. These professionals have a key role to play in signposting potential and existing borrowers to the best available options for their unique circumstances so that they, too, can achieve their homeownership dreams.”

Emma Cox, MD of Real Estate at Shawbrook, commented:

“As we grapple with persistent inflation and high living costs, buyer confidence has wavered. Professional landlords typically use mortgages to expand their property portfolios, so a drop in mortgage approvals can slow down their portfolio growth.

"Nonetheless, specialist lenders are stepping in to assist with complex cases, and Shawbrook has observed an increase in landlords embracing diversification strategies, including more commercial assets. This signals the resilience and adaptability of seasoned investors who remain focused on seizing fresh opportunities."