The number of mortgage approvals for house purchases in November 2022 came to 46,075, shows the latest ‘Bankstats’ data from the Bank of England (BoE).
This is the lowest number seen since June 2020, when there were 40,530, and compares to 68,969 approvals made a year previously, in November 2021.
“A third consecutive monthly decline in mortgage approval levels will certainly seem like cause for concern given the doom and gloom that has enveloped the UK property market in recent months,” says easyMoney founder and chief executive Jason Ferrando.
He continues: “However, when viewed in a longer term context, it’s apparent that this is very much a return to the pre-pandemic norm, albeit a rather bumpy landing, rather than the first signs of a property market collapse.”
The data also shows that credit card lending has been on a steady rise since the start of 2022.
Phoebus chief growth officer Phoebus Software comments on this: “It will be interesting to see just how much additional credit card borrowing there was in December. Did people throw caution to the wind and simply pay for Christmas this way?”
He says: “If so, this will have an effect on the way lenders look at their criteria and affordability checks if borrowers have added to their debt without fully preparing for the payback down the line. It may also put pressure on existing borrowers and lenders will need to be fully prepared to ensure exposed borrowers are identified, and assisted, quickly.”
MT Finance commercial director Gareth Lewis also describes the credit card debt situation as ‘interesting’, saying: “We all have to go through a re-education pattern. This interest rate environment is sensible, not high, and where it should have been a lot sooner. The benign interest rate environment we have got so used to wasn’t sustainable.
He concludes: “It’s not all doom and gloom – once people get their heads around the true cost of getting onto, or moving up, the property ladder and inflation starts to stabilise, buyers will appreciate their true affordability and better understand what they can commit to.”
