Mortgage approvals continued to fall in Q1, down 4.6% on the previous quarter, according to analysis by Octane Capital.
Octane Capital assessed Bank of England mortgage approval data covering the number of approvals and their combined monetary value to see how recent economic turmoil has impacted the housing market.
There were approximately 136,023 mortgages approved during Q1 2023.
This marked a 4.6% decline when compared with Q4 2022, although this was a slower quarterly rate of decline than that seen following September’s mini-Budget, when approval numbers fell by 29.2% between Q3 and Q4 2022.
The total level of mortgage approvals seen in Q1 of this year remained 36.3% lower when compared with the first quarter of 2022.
The total sum lent fell by 34% between Q3 and Q4 of last year, and the £29.4bn lent in Q1 was 6.7% below the final quarter of 2022, and 41.5% down year-on -year.
As a result, the average sum lent to homebuyers was £216,147 during the first quarter of this year. A 2.2% quarterly drop and 8.1% down when compared to Q1, 2022.
Jonathan Samuels, CEO of Octane Capital, said: “While the property market had been showing gradual signs of cooling over the past year, this certainly culminated with a significant reduction in market activity following September’s shambolic mini-Budget as mortgage approval levels dipped by almost a third in a single quarter.
“Unfortunately, while stability may have returned to some degree, the level of buyer activity seen during the open stages of this year is yet to rebound and we’ve seen a further, albeit far more marginal, reduction in approval numbers.”
Samuels added: “With the Bank of England choosing to increase interest rates for a 12th consecutive time this month, it’s unlikely that we will see any notable uplift anytime soon and while we don’t anticipate a market collapse, the result is likely to be a far more subdued outlook for the year ahead.”
