Net residential mortgage approvals increased from 47,900 in October to 50,100 in November, according to the latest Money and Credit statistics from the Bank of England.
Net approvals for remortgaging with a different lender also increased from 24,000 in October to 27,000 in November.
The data also shows that mortgage lending to individuals was at net zero in November compared to £0.1 billion of net repayments in October.
The annual growth rate for net mortgage lending reached 0.3% in November, the lowest since the monthly series began in March 1994.
Gross lending increased from £15.9 billion in October to £16.6 billion in November, while gross repayments decreased from £17.2 billion to £15.6 billion over the same period.
The ‘effective’ interest rate paid on newly drawn mortgages rose by 9 basis points to 5.34% in November. Similarly, the rate on the outstanding stock of mortgages saw a 7 basis point increase, from 3.20% in October to 3.27% in November.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “Back in November, mortgage approvals rose as the pause in rate hikes gave borrowers hope that rates may have peaked.
“Fast forward to a new year and we find ourselves in the midst of a mortgage price war. With HSBC launching a five-year fix at 3.94% today, following Halifax’s reductions of up to 0.83 percentage points on Tuesday, the gloves really are off.
“With 2023 being a disappointing year in terms of amount of business done, lenders are keen to get this year off to a cracking start. It is great news for borrowers who have struggled with affordability over the past few months. Although borrowers remortgaging this year will still see an increase in their payments, the pain will not be as bad as it could have been.
“With a record number of sellers coming to the market on Boxing Day, 2024 could be a promising year for the housing market.”
Reece Beddall, sales and marketing director at Bluestone Mortgages, added: “The rise in mortgage approvals today suggests a gradual recovery from the turbulence in the mortgage market. With December's inflation dropping to 3.9% and the Bank of England holding year-end interest rates, a glimmer of hope appears on the horizon. Lenders swiftly reducing rates in the first week of 2024 is an additional welcome relief for borrowers nationwide, no doubt easing some of their financial concerns.”
