Mortgage Approvals Dip, but Britons Still Borrowing Big
The latest figures from the Bank of England have revealed a slight dip in mortgage approvals last month, but Britons are still borrowing big to get on the housing ladder. Meanwhile, savers are taking advantage of 16-year-high interest rates by investing a record amount into ISAs.
According to the data, there were 61,100 mortgage approvals for house purchases in April, a slight drop from the 61,300 recorded in March. This decrease may be attributed to mortgage rates edging slightly higher in April, as some lenders pushed back expectations for when the Bank of England will next reduce interest rates from their current rate of 5.25%.
Mortgage rates have been on the rise, affecting borrower confidence.
Despite the slight dip in approvals, net mortgage borrowing increased to £2.4 billion for the month, up from £0.5 billion in March. This suggests that while there may be some caution in the market, Britons are still keen to invest in property.
Households are taking advantage of high interest rates to save more.
In fact, households deposited a record £11.7 billion into ISAs, the highest amount since records began in 1999. This surge in savings is likely a result of households seeking to benefit from the high interest rates currently on offer.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented on the data, saying: “Mortgage approvals for new purchases were fairly consistent with the previous month, perhaps reflecting mortgage rates edging upwards, which may have raised borrower concerns with regards to affordability and confidence.”
As inflation moves closer to its 2% target, an interest rate cut is becoming increasingly likely. This could have a significant impact on the housing market, and it will be interesting to see how borrowers and savers respond in the coming months.
Interest rates are on the rise, but a cut may be on the horizon.
In conclusion, while mortgage approvals may have dipped slightly, Britons are still borrowing big to get on the housing ladder. With interest rates on the rise, it’s clear that households are taking advantage of high interest rates to save more. As the market continues to evolve, it will be fascinating to see how borrowers and savers adapt to the changing landscape.
The housing market is constantly evolving, and borrowers must adapt to the changing landscape.
