"Mortgage approvals are the fuel that drives the wider machine of the UK property market and, as it stands, it's benefitting from a full tank, having been running on empty for much of the last two years."
- CEO of Octane Capital, Jonathan Samuels
Net mortgage approvals for house purchases rose to 65,600 in September, the highest level since August 2022, according to the latest Money and Credit statistics from the Bank of England.
Similarly, approvals for remortgaging with a different lender increased by 3,100 to 30,800.
The annual growth rate for net mortgage lending rose to 0.9% in September from 0.7% in August, continuing the upward trend observed since April 2024.
However, net borrowing of mortgage debt by individuals fell by £0.3 billion to £2.5 billion in September, following three consecutive monthly increases.
Gross lending decreased to £19.3 billion in September, from £19.7 billion in August. Similarly, repayments fell by £0.6 billion over the same period, to £17.6 billion.
The average interest rate paid on newly drawn mortgages decreased by 8 basis points to 4.76% in September.
Ryan Davies, strategy director at Bluestone Mortgages, commented: “Today’s uptick in mortgage approvals is proof that borrowers took advantage of the lower rates we’ve seen in recent months. However, with looming uncertainty around the Autumn Budget and lenders starting to increase their rates again, we’re likely to see a drop-off in volumes in the coming weeks."
CEO of Octane Capital, Jonathan Samuels, said: “Mortgage approvals are the fuel that drives the wider machine of the UK property market and, as it stands, it's benefitting from a full tank, having been running on empty for much of the last two years.
"Buyers are returning with confidence and whilst they may pause for breath ahead of tomorrow’s Autumn Statement, we expect to see 2024 finish on the front foot.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Mortgage approvals for new purchases rose again, which bodes well for a strong final quarter to the year for the housing market. Remortgaging has also picked up, suggesting a growing number of borrowers are drawn to 'best buy' rates offered by other lenders, rather than sticking with their existing provider as lenders compete for business.
“The effective interest rate paid on new mortgages decreased to 4.76 per cent as lower pricing is reflected in the official figures and we expect this trend to continue in coming months."
