Mortgage approvals for house purchases fell by 3,100 to 60,500 in April, Bank of England data shows, the third month of declines in a row.
The data follows stamp duty changes by the Treasury at the end of March, which include the nil-rate halving to £125,000 from £250,000, reversing thresholds set in the September 2022 mini-Budget.
However, the central bank’s latest Money and Credit report shows that remortgage approvals lifted by 1,600, to 35,300 in April.
But net mortgage borrowing was “sharply” down by £13.7bn in April, following an increase in borrowing by £9.6bn in March.
Gross lending also fell “significantly” to £16.9bn in April, from £39.9bn the month before, the steepest fall since June 2021. z
Gross repayments were down in April to £18.4b, from £23.7bn.
The annual growth rate for net mortgage lending slipped to 2.5% from 2.7% in April.
The data comes after the Bank’s Monetary Policy Committee voted to cut the base rate by 0.25% to 4.25% last month, while inflation rose sharply to 3.5% in April from 2.6%.
Pepper Advantage UK managing director Aaron Milburn says: “UK mortgage approvals have declined for the third consecutive month, casting a shadow over the outlook for early 2025 and prompting renewed calls for the Financial Conduct Authority to reassess current lending regulations.
“While the recent interest rate cut may provide some relief for existing borrowers, the data highlights the market’s ongoing struggle with economic uncertainty. Persistently high inflation and broader macroeconomic pressures continue to dampen expectations for further rate reductions, leaving the mortgage market in a prolonged state of flux.”
Zoopla executive director Richard Donnell adds: “A slowdown in demand for mortgages in April reflects the impact of a late Easter. We expect mortgage data for May to increase in line with a pick up in new sales being agreed, which are running at their highest level for four years.
“A key factor is also lenders relaxing affordability tests, which is delivering the average home buyer up to 20% more borrowing capacity compared to a few months ago.
“We expect a busy June as buyers look to secure sales before the summer holidays kick in.”
North London estate agent and former Rics residential chairman, Jeremy Leaf, points out: “Always a good indicator of future market activity, these mortgage approval numbers may have dropped but don’t tell the whole story.
“Firstly, the change has proved to be relatively modest and buyers may be pausing but are still proceeding with their moves, as they take advantage of lower repayments and greater availability of higher loan-to-value mortgages.
“Secondly, we do not expect too much change going forward, particularly as most seem to accept now that base rate is unlikely to fall as far and as fast as anticipated.”
