Mortgage approvals remain above pre-pandemic levels with January uptick: BoE

This is above the pre-pandemic average of £4.3 billion in the 12 months up to February 2020, and the highest since September 2021 (£9.4 billion). Gross lending rose to £23.8 billion in January, from £22.0 billion in December.

Approvals for house purchases rose to 74,000 in January, above the 12-month average up to February 2020 of 66,700 and the highest since July 2021 (75,900). Approvals for remortgaging with a different lender also rose, to 46,200 in January. This remains below to the 12-month average up to February 2020 of 49,500, but is the highest since February 2020 (52,300).

Dave Harris, CEO at more2life, commented: “Today’s findings are a welcome confirmation that mortgage market activity remains robust in spite of wider economic concerns. Activity is levelling out from the volatility we saw last year and returning to strong and stable pre-pandemic levels.

“Although the road ahead looks promising, inflation is likely to act as a speedbump. With many borrowers’ saving accounts and pension pots having already taken a hit in recent months, we expect a growing number of older homeowners to turn to equity release to keep pace with the rising cost of living. UK house prices have seen record growth in recent months, making the chance to unlock this added equity a silver lining for many. As such, Q1 will see equity release become an increasingly attractive means to augment retirement income and afford a comfortable later life.”

Gareth Lewis, commercial director at MT Finance, said: "January is generally expected to be one of the quieter months for the housing market and yet this year, that hasn’t been the case. Consumer confidence in terms of people looking to transact, which is demonstrated in these figures, is reflected in what we have seen, as we have enjoyed our best ever month in our 14-year history. February has followed a similar trend, with a huge amount of positivity out there among buyers.

"It will be interesting to see what happens over the coming couple of months with regard to purchase transactions. We are likely to see a further increase in base rate and with the bigger lenders starting to raise their mortgage rates, borrowing costs are set to edge up across the board. This may see people clamour to get deals done sooner rather than later, focusing minds on low rates while they are still available, and mean a continuation of these positive figures."