Net mortgage approvals increased to 50,500 in December from 49,300 in November, according to figures from the Bank of England
UK mortgage approvals soared to a six-month high as the average rate declined for the first time since November 2021 as lenders compete for business.
Net mortgage approvals increased to 50,500 in December from 49,300 in November, as per figures from the Bank of England (BoE).
Net approvals for remortgaging rose to 30,800 in December from 25,700 in November.
It comes as Bank of England figures showed the “effective” interest rate — the actual interest paid — on newly drawn mortgages dropped by six basis points to 5.28% in December. It was the first time the cost of borrowing declined since November 2021.
Alice Haine, personal finance analyst at Bestinvest, noted: For now, the better interest rate outlook is already feeding through to the market with new buyers able to secure considerably better mortgage deals than the hyper-expensive products on offer last summer.
Buyers can take further comfort from January’s heated mortgage price wars as lenders battled to attract new customers and retain existing clients, she added.
Lenders have engaged in a mortgage price war in which they have reduced the costs of new fixed-rate deals to try to stay at the top of the best-deal tables.
Markets expect prices to stabilise in 2024 as financial markets bet on the Bank of England reducing interest rates from the middle of the year.
Akhil Mair, director at Our Mortgage Broker, believes the official figures will likely show a further rise in approvals in January, given high levels of demand.
He added: The surge in mortgage enquiries and subsequent applications since early December has been truly remarkable. There has been a dynamic blend of FTBs eagerly stepping onto the ladder and seasoned home movers seeking new horizons.