Mortgage approvals climb for third consecutive month

Mortgage approvals on house purchases for August sit at 64,858 up (3.8%) from 62,496 in July.

Following revised figures from the Bank of England, this marks three consecutive months of positive growth in mortgage approval levels with the monthly figure having increased since May.

Approvals remain considerably higher (43.4%) than the 45,219 seen in August 2023.

There is also optimism for further mortgage approval increases in the coming months, especially if a bank rate cut materialises in November.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage approvals for new purchases rose again, which bodes well for housing market activity in the final quarter.

“Remortgage approvals also picked up after a dip in July, suggesting a growing number of borrowers are drawn to ‘best buy’ rates offered by other lenders, rather than sticking with their existing provider.”

CEO of Octane Capital, Jonathan Samuels, said, “Mortgage approval levels have continued to climb for the third consecutive month which signals that buyers are returning to the market at mass in order to make their move this side of Christmas.

“We haven’t quite seen the reduction in mortgage rates that you might expect following August’s base rate reduction, however, it remains very early days and what we have seen is a significant cut to rates across all lending segments when compared to this time last year.

“This increased level of borrowing affordability has come as a result of increased market stability following the Bank of England’s original decision to hold rates at 5.25% in September of last year and, with market conditions continuing to improve, it’s only a matter of time before we see further rate reductions.”

Co-founder and CEO of GetAgent.co.uk, Colby Short, added, “We’re continuing to see a robust level of mortgage market activity where approvals are concerned  and there’s no doubt that last month’s base rate reduction will have helped to further steady the ship in this respect.

“The mortgage sector has responded well to this decision and, while we may have seen a hold in September, we’re now seeing a wider range of products available to homebuyers, which is providing even greater choice and flexibility to those looking to climb the ladder.”

Karim Haji, global and UK head of financial services at KPMG, said, “A rise in consumer borrowing in August could signal that many stretched households are still battling the cost of living by turning to credit to get by.”