Approvals up more than 2% in December
Mortgage approvals rose for the third consecutive month in December to reach their highest level since last June.
Bank of England data published this morning showed approvals had risen 2.3% from 49,313 in November to 50,459 in December.
The figure was 25.6% up on the year, compared with the 40,186 approvals registered in December 2022.
Approvals for remortgaging also increased from 25,700 in November to 30,800 last month.
Individuals repaid, on net, £0.8bn of mortgage debt in December compared to net zero in November.
Octane Capital chief executive Jonathan Samuels said homebuyers were “continuing to grow in confidence, buoyed by a reduction in interest rates” but noted that rate reductions had been based on expectations that the Bank of England would reduce the base rate this week.
“These expectations have been changing in recent weeks and we’ve seen swap rates start to creep up based on the likelihood that the base rate will remain at 5.25% for the immediate future,” Samuels said.
“As a result, mortgage approvals have climbed, but not at the rate forecast, and we anticipate that should mortgage rates start to climb again in February it could further dampen the enthusiasm that has been shown by buyers in recent months.”
>> Read more: Average house price up £4,500 in January, says Rightmove
>> Read more: Major lenders cut mortgage rates
Guy Gittins, chief executive of Foxtons, said the increase showed “not even the usual lull of the Christmas period” could deter the “pent up demand” of buyers.
He said he expected the Bank of England rate to hold at 5.25% but hoped rates would start to fall again this year.
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