Finance

Mortgage approvals rose in November as lenders reduced rates

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Net mortgage approvals for house purchases increased to 50,100 in November from 47,900 in October, as per figures from the Bank of England

Mortgage approvals in the UK rose in November as lenders reduced rates, while credit card borrowing doubled to £1 billion.

Net mortgage approvals for house purchases increased to 50,100 in November from 47,900 in October, as per figures from the Bank of England.

This is the highest since June, beating economists’ forecasts of a rise to 48,800. Approvals of remortgaging rose to 27,000 from 24,000.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased by 9 bps to 5.34% in November.

However, the annual growth rate for net mortgage lending touched 0.3% in November, the lowest since records started in March 1994.

It comes as lenders have been reducing mortgage rates in a battle to win customers amid expectations that the BoE will begin reducing borrowing costs this year.

Emily Williams, director of research at Savills, said: Buyers who do not have to move are continuing to hold off while the cost of debt remains high.

Looking ahead, there are encouraging signs for mortgaged buyers. Two and five year swap rates have fallen considerably in the last month, following December’s encouraging inflation figures, she said.

Several lenders have already reduced rates on mortgage products this week as a result, with two-year fixes now available at rates below 5%, she added.

HSBC’s two-year fixed rate for remortgages has slipped below 4.50% for the first time since early June in 2023, with the headline rate reaching 4.49%, for those with a 40% deposit.

For those looking to fix longer term, HSBC is now offering a 10-year fixed rate deal starting from 3.99%.

Britain’s biggest mortgage lender, Halifax, reduced the price of its two-year fixed-rate remortgage from 5.64% to 4.81% on Tuesday.

Leeds Building Society has made rate cuts across its mortgage range for both FTBs and those looking to renew their mortgage.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Invest for Property. The information provided on Invest for Property is intended for informational purposes only. Invest for Property is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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