At the same time the interest rate paid on newly drawn mortgages declined by 0.6%, which is the first time it has dropped in three years
The number of mortgages offered to home buyers went up from 49,300 in November to 50,500 in December, against the normal seasonal downturn.
Meanwhile, the number of remortgages approved increased from 25,700 to 30,800 in the month, per data from the BoE.
At the same time the interest rate paid on newly drawn mortgages declined by 0.6%: this is the first time it has dropped in three years.
Charlotte Nixon, mortgage expert at Quilter, says: This modest rise in mortgage approvals could indicate a stabilising or marginally more optimistic housing market. However, the numbers are still comparatively modest, reflecting ongoing caution among both borrowers and lenders because of economic uncertainties such as job security. In uncertain times, reducing debt can be a way to decrease monthly expenses and prepare for potential financial strains.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, is more optimistic and says: The rise in buying and selling activity we noticed in early January clearly started several months back, following the declines in inflation. These mortgage approvals offer a comprehensive snapshot as they cover not just the data of individual lenders but the broader marketplace and are a reliable indicator of future activity. As a result, the market improvement is likely to be sustained despite the recent rise in the cost of living and increase in stock levels which is keeping a cap on prices.
Meanwhile Simon Gammon – managing partner at Knight Frank Finance, says: Mortgage approvals for house purchase accelerated between November and December and posted a 42% gain compared to December last year. Dropping mortgage rates have transformed sentiment among borrowers and we will see a busy spring market this year. High street lenders seem to have called a temporary truce in their price war after economic indicators published in January pushed back the likely date of the BoE’s first rate cut.