Mortgage approvals for houses continues to climb

Net mortgage approvals for houses purchased across the UK had risen from 60,500 in February to 61,300 in March 2024, marking the highest number of net approvals since September 2022, Bank of England data has revealed. On the other hand, net approvals for remortgaging had decreased, from 37,700 to 34,200 over the same period.

Net approvals in January were 56,100, showing that it has been climbing every month so far this year. The figure for March exceeded the 56,600 predicted by economists and marks a 17-month high.

The “effective” interest rate, which is the actual interest rate paid, on newly drawn mortgages has fallen by 0.29 percentage points, down to 4.9% in February, the central bank reported. It is the lowest rate since August 2023. Separate figures from Nationwide showed house prices had dipped unexpectedly by 0.2% per month in March. However, they were still 1.6% behind March last year. This marks the fastest annual rate of increase since December 2022, with London continuing to be the country’s most expensive region.

Mortgage approvals and house prices are monitored by interest-rate setters as being signs of the health of the property market. The market has wider effects on the economy and is a crucial factor for monetary policy decisions from the government. The new figures suggest a continued recovery in the housing market, coming after a decline in mortgage rates from their peak in the summer of 2023.

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