"While we’re yet to see interest rates fall, a freeze since September of last year has certainly steadied the ship and provided the nation’s homebuyers with the confidence required to re-enter the market."
- CEO of Octane Capital, Jonathan Samuels
Net mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March, the sixth consecutive rise and the highest number of net approvals since September 2022, the latest Money and Credit statistics from the Bank of England show.
Conversely, net approvals for remortgaging with a different lender decreased from 37,700 to 34,200 over the same period.
Gross lending rose from £18.6 billion in February to £20.1 billion in March, the highest amount since February 2023. Likewise, gross repayments increased from £16.6 billion to £19.5 billion over the same period.
The average interest rate paid on new mortgages decreased by 17 basis points, to 4.73% in March, while the rate on the outstanding stock of mortgages increased by 2 basis points, to 3.50%.
Tony Hall, head of business development at Saffron for Intermediaries, commented: “It certainly feels like the mortgage market recovery is underway as gross lending and mortgage approvals continue to rise. All eyes are now on when we might see that first base rate cut since the onset of the pandemic, which should drive more consumers back to the market.
“The economy still faces a number of challenges, with inflation falling at a slower rate than many expected, and this could delay a rate reduction by the Bank of England. Wage inflation and a more timid approach to rate cuts in the US are also leading some analysts to predict that the base rate may stay put until Q4. However, it’s refreshing that the debate about the Bank of England’s position has clearly shifted to when, and not if, rate cuts will happen. This speaks volumes about where the market is now compared to even six months ago, and we look forward to helping advisers and borrowers take advantage of the opportunity this provides.”
CEO of Octane Capital, Jonathan Samuels, said: "Stability is key when it comes to mortgage market health and while we’re yet to see interest rates fall, a freeze since September of last year has certainly steadied the ship and provided the nation’s homebuyers with the confidence required to re-enter the market.
As a result, we've now seen the level of mortgages being approved climb consistently for the last six months and this is a significant sign that the market is slowly, but surely, returning to full health.”
Gareth Lewis, managing director of MT Finance, added: “With net purchases continuing to rise, people are willing to put their hands in their pockets and buy property. The longer this continues, the more positivity and consumer confidence this will generate.
“It is also encouraging that the net interest rate has gone down again but the problem is that Swap rates are rising, and product pricing is going up accordingly. However, even if rates do creep up a little, this shouldn’t have too negative an impact as confidence in house prices and where we are going to be from a rate environment is unlikely to suppress too much optimism.
"When the sun comes out, people are far more positive so while mortgage rates are edging upwards, this is unlikely to have such a negative impact as it would have done in say, December.
"Businesses are also borrowing which is a good sign, as lenders are confident that their propositions are sustainable.”
