Net mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March, the highest number of net approvals since September 2022, according to Bank of England data published on Tuesday.
Conversely, net approvals for remortgaging decreased from 37,700 to 34,200 over the same period. Newspage asked brokers for their views.
Stephen Perkins, managing director at Yellow Brick Mortgages said, “I’m slightly surprised by this data.
“For us, both March and April have seen the mortgage market stutter and lurch. Some weeks in March it felt like activity was starting to go through the gears but the next week it stalled.
“With the Bank of England consistently stating rates will be higher for longer, and lenders starting each week by increasing their rates, the market is not going anywhere fast just yet.
“The revs are building though, largely a result of pent-up demand, which perhaps explains the slight uptick in approvals.
“So when the handbrake is finally released, things could fly. We really need that first rate cut from the Bank of England, which has the potential to ignite the mortgage and property markets.”
Simon Bridgland, borker and director at Release Freedom said, “Though remortgage and product transfer applications for both buy-to-let and main residential property were active in March and April, mortgage approvals for new purchases saw a definite contraction in our experience so this uptick is a bit of a surprise.
“The rate war excitement and expectations for a base rate cut at the start of the year have both been kicked into the long grass.
“The potential for any respite for those on variable rates has been pushed further away into the latter half of the year.
“On the flip side, borrowers I have been engaging with for later life mortgage business are not overly concerned with rates, as many have needs-based reasons for arranging products such as lifetime mortgages.
“Those looking with aspirational reasons, although fewer in number, have come to realise that the rates we are experiencing now are the norm and should not be considered high. The recalibration around mortgage pricing is almost now complete.”
Justin Moy, managing director at EHF Mortgages said, “March, much like April, was a challenging time for the mortgage market after a strong start to the year.
“It definitely feels like homebuyers have become more cautious but the momentum from January and February may well have continued through into March based on this evidence.
“Many people aren’t aware mortgage rates have increased but the ‘little and often’ price changes are being felt by new borrowers in particular.
“Though there has been a drop-off in actual applications, there’s still reasonably strong demand for Decision in Principles and affordability checks. Keeping existing cases moving forward has been challenging, with delays at lenders, many of whom are demanding more and more documents and umpteen days of processing.
“The next inflation data will show improvements, but with the other distractions around the world I don’t see us reducing rates to the level we expected a few months back, and this will just accelerate a slowdown in the economy throughout 2024.”
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