Average monthly mortgage approval levels are at their highest for four years, says Alexander Hall, and while activity is “some way off historic highs” the market is on track to top 780,000 approvals this year.
The broker firm, owned by Foxtons, analysed approvals data from the Bank of England to see where the market sits “as a result of improving borrower sentiment, driven by a string of reductions to the base rate”.
The Bank’s Monetary Policy Committee has made four quarter-point rate cuts since last August, bringing the interest rate to 4.25%.
The broker found so far this year, the number of monthly mortgage approvals has averaged 65,119.
This is some 4% higher than the average monthly total seen throughout 2024 following a 31% increase between 2023 and 2024.
The firm says that, while provisional, this current level of mortgage approval market activity is the highest seen since 2021 and, as a result, forecasts that total mortgage approvals could hit 781,429 at the end of 2025.
Alexander Hall director of partnerships Stephanie Daley says: “The mortgage sector has been benefiting from improving consumer sentiment since the Bank of England first put a hold on interest rates back in September 2023 and this momentum has only grown stronger following the four cuts that have materialised since.
“As a result, we’ve seen consistently positive growth in mortgage approval numbers over the course of the last year and it’s apparent that this trend has continued into 2025.
Daley adds: “Of course, we’re yet to see the market return to full strength when comparing current activity to previous historical highs, but it’s also important to note that while there have been improvements to market affordability by way of stronger earnings growth, the nation’s homebuyers are facing a considerably tougher task in today’s market.
“Despite these challenges, we’re on course to see total mortgage approvals exceed the 780,000 threshold this year, which demonstrates that buyer appetites are very much alive and well in today’s market.”
