There were 60,000 new mortgages approved in June, a marginal drop from the 60,100 recorded in May, according to the Bank of England
The number of mortgage approvals by lenders held steady last month in a sign the UK’s housing market is stabilising after being hit by high interest rates.
There were 60,000 new mortgages approved in June, a marginal drop from the 60,100 recorded in May, according to the Bank of England.
Borrowers took on £2.7 billion of mortgage debt during the month, marking a rise from £1.3 billion in May.
The BoE’s money and credit data showed there were 59,976 mortgages approved, compared with 60,134 in May. The report said: Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, stayed broadly stable at 60,000 in June.
Despite the base rate holding at 5.25% since August last year, the recent trend of inflation reaching the 2% target level for the last two months has fuelled optimism that interest rates might soon be lowered, potentially easing the financial burden on borrowers.
Nathan Emerson, chief executive of estate agent body Propertymark, said: Today’s figures show that the general election did not damage people’s confidence in borrowing money to buy their next home in the way many may have expected. Momentum has sustained itself, and now with a newly elected government ambitious about building new homes, we hope that confidence increases further in the housing market.
However, approvals for remortgaging with a different lender dropped to 27,500 in June, from 29,300 in May.
Lucian Cook, head of residential research at estate agent Savills, said: June’s mortgage approvals provide further evidence that the general election had relatively little impact on home buyer sentiment, and that an increase in activity will depend more on what happens to the Bank base rate in coming months.
Simon Gammon, managing partner at Knight Frank Finance, said: Mortgage approvals continue to hover in the 60,000 range, down from around 66,000-a-month before the pandemic.
Repeated false dawns in the battle against inflation have left the property market stuck in first gear, but it is now very likely that we’ll have a busier second half of the year. Lenders have reduced margins to the bone in the battle for market share, and this pattern should continue as the BoE offers some relief in the form of cuts to the base rate, he added.