Net mortgage approvals for house purchases increased by 900, to 64,200 in June. This is according to the latest figures from the Bank of England.
Approvals for remortgaging also increased by 200, to 41,800 in June, which represents the highest number of approvals for remortgaging since October 2022 (50,000).
The BoE data also reveals that net borrowing of mortgage debt by individuals increased by £3.1bn to £5.3bn in June, compared to a £2.8bn increase to £2.2bn of net borrowing in May.
Commenting on the latest figures KPMG UK head of financial services Karim Haji said: “June’s rise in mortgage approvals and remortgaging activity reflects growing borrower confidence amid increasing competition between lenders. Despite lingering cost-of-living pressures, more households are re-entering the market, either to secure better remortgage deals or take advantage of slightly improved affordability conditions.”
He added: “Lenders must remain attuned to the financial resilience of their customers, particularly as inflation remains above target and uncertainty around future rate decisions continues.”
Confidence boost
MT Finance director Tomer Aboody said: “With rising borrowing numbers when it comes to mortgage approvals and debt, we are seeing how lower mortgage rates are helping fuel confidence in borrowers looking to take a step onto, or move up, the ladder.
“Another rate cut this year would encourage further activity. Although transaction numbers are increasing, they’re still lower than previous years which is of course much to do with higher stamp duty and taxes imposed by the Chancellor in her last budget.
“Encouragement is needed to boost activity and fuel the economy, which can either come via a restructure of stamp duty and/or restructure of taxes.”
Zoopla executive director Richard Donnell was encouraged that demand for mortgages to buy homes increased in June as stable mortgage rates and changes to mortgage affordability encouraged more buyers to agree home purchases.
“Zoopla data shows unusually high levels of housing market activity for the early summer with sales agreed up 8% on last year and 11% more buyers in the market. While activity levels are higher this isn’t feeding into house price inflation which is slowing. We expect increased housing activity to support demand for mortgages in the rest of the year.”
Evelyn Partners personal finance analyst Alice Haine said it appeared slower house price growth in June, stamp duty changes, geopolitical uncertainty and a lacklustre economic outlook, failed to deter committed buyers from taking action and plunging into the market.
“Any buyers purchasing a property since April 1 are subject to the previous, lower stamp duty thresholds, so while some may be reevaluating their affordability position, others are pushing ahead with purchases.
“Despite inflationary pressures forcing consumers to grapple with higher household, energy and food bills once again, affordability is improving for buyers. This was evident in the effective rate on newly drawn mortgages, which eased to 4.34% in June compared to 4.47% in May.
She added that with geopolitical concerns easing since June, mortgage activity was expected to pick up further in the months ahead, particularly if the anticipated base rate cut in August materialises and house prices weaken.
“Pair easing mortgage rates with recent mortgage reforms announced by Chancellor Rachel Reeves, which will allow more borrowers to secure loans of more than 4.5 times their annual income, and the road ahead may feel a little easier for first-time buyers eager to make a purchase.”
