Mortgage approvals drop to lowest level in six months

Mortgage approvals drop to lowest level in six months

In August, mortgage approvals fell to 45,400, the lowest level in six months as high mortgage rates caused major affordability challenges for buyers. Net approvals for remortgaging, which encompasses remortgaging with a different lender, also saw a significant drop from 39,300 to 25,000 during the same period, the lowest since July 2012 at the lowest level. Experts argue this may be because many people who had their mortgage up for renewal in the near future opted to get it sorted as early as possible, fearing rates were going to get even higher. This decline in mortgage approvals signal that mortgage lending is likely to stay weak in the final months of the year as cost-of-living pressures and high borrowing costs make it challenging for buyers to secure the homes they want.

The mortgage affordability crunch may be easing, but borrowing costs are expected to remain at substantial levels for some time, resulting in further downward pressure on the housing market.

Net borrowing of mortgage debt by people increased from 0.2 billion in July to 1.2 billion in August. The fourth consecutive monthly increase in mortgage borrowing and the highest since January 2023. Karen Noye, Quilter's mortgage specialist, said: Mather-Holgate, a Swindon-based advisory firm Mather & Murray Financial, said: 'It's time for the market to change,' said Mather & Murray Financial.