UK net mortgage approvals rise to highest level since August 2022

UK net mortgage approvals for house purchases, a leading indicator of future borrowing, rose by 700 to reach 65,650 in September 2024—the highest level recorded since August 2022 and exceeding market expectations of 64,900.

UK net mortgage approvals rise to highest level since August 2022

This rise signals stronger-than-expected housing demand in the UK, possibly spurred by anticipation of rate adjustments and shifts in economic sentiment. Likewise, approvals for remortgaging with new lenders increased for the second consecutive month, reaching 30,800, a gain of 3,100 month-on-month.

UK mortgage rates show slight easing amid increased demand

Meanwhile, the ‘effective’ interest rate on newly drawn mortgages saw a slight easing, dropping by 8 basis points to 4.76% in September, possibly reflecting slight adjustments in lender rates to capture increased demand. However, the interest rate on the outstanding mortgage stock ticked marginally to 3.74% from 3.72% in the prior month, as overall market rates stabilized amidst ongoing economic assessments. These data points suggest a cautiously optimistic environment in the UK housing sector. However, future activity will likely hinge on further interest rate decisions and economic resilience in the months ahead.