Mortgage approvals fell to 49,400 in July, the lowest level since April, according to data from the Bank of England.
In addition, the average rate on new mortgages rose 3 basis points, to 4.66% in July.
Sarah Coles (pictured), head of personal finance at Hargreaves Lansdown shared her thoughts on the future of the mortgage market, in light of the widespread tumult of July.
She said: “Rampant rate rises in July sent borrowers running for cover.
“The average rate on new mortgages rose 3 basis points, to 4.66% and mortgage approvals fell back below 50,000 – the lowest level since April this year.
“It’s still well above the lows we hit in the aftermath of the mini-Budget, but it demonstrates the impact of the bump in mortgage rates in July – after the market was convinced we’d need more rate rises to bring inflation under control.”
She continued: “On the plus side, rates started to back off at the start of August, so it may have helped halt the decline in approvals.
“However, rates are still incredibly high by historic standards, and Zoopla figures show that as a result, it’s now 10% cheaper to rent than buy that same property and pay a mortgage on it.
“It means that any recovery in approvals is unlikely to shoot the lights out.”
“This matters because approvals give us an insight into buyer demand over the next few months. It means we’re likely to see demand stay depressed, sales sluggish, and house prices under pressure again.”
