Net mortgage approvals for house purchases were 61,100 in April, little changed from 61,300 in March, The Bank of England’s latest Money and Credit report has revealed.
Net approvals for remortgaging decreased to 29,900 from 33,500 over the same period.
Individuals borrowed, on net, £2.4bn of mortgage debt during the month, compared to £0.5bn in March.
The annual growth rate for net mortgage lending rose for the first time since October 2022, to 0.2% in April from -0.1% in March.
Gross lending rose slightly to £20.6bn in April from £20.5bn, its highest level since January 2023.
Over the same period, gross repayments decreased to £19.0bn from £19.4bn.
In April, UK non-financial businesses – PNFCs and public corporations – repaid, on net, £1.1bn in loans to banks and building societies.
The net flow of sterling money – known as M4ex – was £10.3bn in April.
This was mainly driven by households’ holdings of money, which increased by £8.4bn, the highest flow since September 2022.
Within the increase in households’ holdings of money, households deposited an additional £11.7bn into ISAs, the highest since records began in April 1999.
The flow of sterling net lending to private sector companies and households (M4Lex) decreased to £1.2bn throughout the month.
This was mainly driven by a decrease in net lending to non-intermediate other financial corporations (NIOFCs) to a flow of -£1.0bn from £9.8bn in March.
Reaction:
Karen Noye, mortgage expert at Quilter:
“According to new statistics from the Bank of England, despite April usually being a relatively busy month for the property market net mortgage approvals for house purchases totalled 61,100 in April, marginally less than in March.
“Similarly, net approvals for remortgaging decreased to 29,900 from 33,500 over the same period.
“Given that mortgage rates remain volatile and the economic outlook still unpredictable it is unsurprising that people are less inclined to embark on huge life decisions like buying a house.”
Holly Andrews, intermediary team manager at Saffron for Intermediaries:
“It is important to remember that today’s figures come off the back of six months’ of growth in mortgage approvals.
“While the slight dip today reflects the current financial pressures faced by borrowers, we expect activity to start increasing again as we move into the summer – a peak time for property transactions.
“When you add in inflation at its lowest level in almost three years, we can expect potential buyers to be eager to take the next step onto the property ladder.
“At Saffron, we are excited to help advisers and borrowers capitalise on the opportunities now available.”
Alistair Singer, director of My Home Move Conveyancing:
“Another strong month of mortgage approvals demonstrates that buyer confidence is building despite the fact that interest rates are yet to come down.
“With a cut expected in the coming months, we should see a further surge in activity as buyer confidence is bolstered by the first reduction to interest rates in four years.
“With a stable and strengthening housing market, any election activity is unlikely to have a material impact on momentum.
“Indeed, depending on the outcome, we often get a post-election bounce so we expect the market to strengthen further as the year progresses.
“Although it’s important to note that as the market does heat up, the time it takes to transact is likely to increase as higher demand puts strain on operational efficiency and market capacity including the conveyancing process”
Jonathan Samuels, CEO of Octane Capital:
“Current market performance indicates that the mortgage sector is set for a strong year following a period of muted activity spurred by higher interest rates.
“Despite the fact that a rate reduction is yet to materialise, we’ve seen buyer activity build since the base rate has been held and this is likely to continue with a potential cut on the horizon.
“Buyers are still advised to act with caution and not to overstretch when looking to secure a mortgage, however, the likelihood is that in the mid to long term, mortgage rates are set to come down.”
Jason Ferrando, founder and CEO of easyMoney:
“Mortgage market momentum continues to build and the outlook for the property market as a whole is certainly one of far greater positivity compared to much of last year.
“While news of a general election may now be hitting the headlines, it won’t act as a deterrent to the property market, which has overcome far greater obstacles of late than a change of tenant at Number 10.”
Colby Short, co-founder and CEO of GetAgent.co.uk:
“Property market optimism is at a high and such consistently strong mortgage approval levels will only add fuel to the fire as buyer activity continues to strengthen.
“This is despite the fact that interest rates remain at 5.25% and it’s clear that while the cost of borrowing remains high, buyers have responded to the certainty provided from a hold on the base rate.
“The expectation is that the market will now march forward, undeterred by the upcoming election, with the prospect of a rate cut likely to boost market sentiment even further over the coming months.”
