Mortgage Approvals Dip Slightly Despite Increase in Lending

The UK housing market has seen a slight dip in mortgage approvals, but Brits are still borrowing more to climb onto the property ladder. According to new figures from the Bank of England, there were 61,100 mortgage approvals for house purchases in April, down from 61,300 in March, which was the highest level since September 2022.

Mortgage approvals dip slightly

This followed a slight rise in mortgage rates in April as some lenders delayed expectations for when the Bank of England will next cut interest rates from their current rate of 5.25%. Approvals for remortgaging also fell to 29,000 for the month, down from 33,500 in March.

However, there was a boost in net mortgage borrowing for the month, up to £2.4 billion of mortgage debt from £0.5 billion a month earlier. Meanwhile, consumer credit borrowing dropped to £0.7 billion in April from £1.4 billion, as households spent less on credit cards.

Savers ploughed a record sum into ISAs

Data also revealed that households’ holding of money increased by £8.4 billion for last month. This came as households deposited £11.7 billion into ISAs, the highest for the savings account since records began in 1999.

Mark Harris, the chief executive of mortgage broker SPF Private Clients, commented: “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.”

“The average interest rate paid on newly-drawn mortgages increased slightly by 7 basis points to 4.74%, reflecting some higher mortgage pricing on the back of rising Swap rates. Since then, inflation has moved closer to its 2% target, making an interest rate cut increasingly likely.”

Mortgage rates edge upwards

As a homeowner myself, I’ve been keeping a close eye on the mortgage market. While the slight dip in mortgage approvals may seem concerning, it’s reassuring to see that Brits are still borrowing to get onto the property ladder. The boost in net mortgage borrowing is a positive sign for the housing market, and I’m hopeful that interest rates will continue to fall in the coming months.

House prices remain steady

In conclusion, while mortgage approvals may have dipped slightly, the UK housing market remains strong. With interest rates on the rise, it’s essential for borrowers to stay informed and plan their finances carefully. As a nation, we must continue to support first-time buyers and encourage homeownership.

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