Banks and building societies authorised 61,325 home loans, up from 60,497 in February and the most since September 2022
Britain’s housing-market recovery continued into March as mortgage approvals rose for a sixth month, according to Bank of England figures.
Banks and building societies authorised 61,325 home loans, up from 60,497 in February and the most since September 2022. Economists had expected 61,500. Unsecured credit, including credit card debt, rose £1.6 billion, slightly higher than forecast.
Buyers are being lured back into the housing market by a brighter economic outlook and increased affordability after a steep decline in mortgage rates since last summer. Nevertheless, a recent rise in borrowing costs has raised questions over whether the recovery can continue.
The threat was highlighted on Monday when Natwest, Santander and Nationwide became the latest big lenders to raise mortgage rates this month in response to rising swap rates, which are used to set the bulk of mortgage products. For the one million households due to refinance fixed-rate mortgages by end of the year, new loans will be pricier than the ones they are presently on.
The move higher has come as investors reappraise how far the Bank of England will reduce interest rates after warnings by policymakers of persistent price pressures and UK’s hotter-than-expected inflation data.
Traders, who were pricing in as many as six quarter-point cuts in 2024 at the start of this year, now expect just two.
The average two-year fixed-rate mortgage is now around 5.9 per cent, compared with nearly 5.5 per cent back in January, as per Moneyfacts.
The Bank of England said that the effective rate on newly drawn mortgages dropped 17 bps to 4.73 per cent in March.
The post Mortgage approvals hit 18-month high first appeared on Invest for Property London, Buy Residential property UK.
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