The latest data from the Bank of England has revealed a noticeable uptick in mortgage approvals, suggesting renewed momentum in the housing market despite ongoing economic headwinds. Industry experts have weighed in on what this could mean for the market moving forward, highlighting signs of improved confidence while also warning of underlying challenges such as inflation, interest rate pressures, and infrastructure bottlenecks across the mortgage process.
Nathan Emerson, CEO of Propertymark, comments:
“An uplift in the number of mortgage approvals is encouraging to witness. Many cogs need to turn harmoniously together when it comes to consumer confidence and affordability, and despite challenges within the wider economy, it is positive to see people being able to take their next step onto the housing ladder with greater ease.
There are still concerns which need to be acknowledged, however, such as inflation sitting close to double what the Bank of England have targeted and the influence this can have regarding base rate decisions. Despite this, we remain in a much stronger position than we started the year at, when the base rate stood much higher at 4.75%.”
Joe Pepper, UK Chief Executive Officer, PEXA, said:
“Sticky inflation and interest rates remaining has created a little bit of apathy in the market – people are no longer waiting for a better rate environment to buy or remortgage because they aren’t necessarily expecting this to happen any time soon. Empowering more individuals to confidently mortgage and remortgage. We are also starting to see the positive impact of affordability measures introduced earlier this year and it is positive to see the market start moving in the right direction.
However, as mortgage approvals increase, bottlenecks form across the market because the technology that sits behind the transaction process simply isn’t up to the job. Conveyancers, who are already under significant strain, will be pushed to their limits because they don’t have the right tools and technology in place to help them deal with demand. We need far greater attention placed on reforming the back-end infrastructure that supports the process to overcome this, delivering a more certain, secure and streamlined process. Addressing this could not be more urgent if we are going to maintain growth and reap the benefits.”
Leading solutions provider, Phoebus stated:
“The latest Money and Credit figures from the Bank of England show the mortgage market bounced back strongly in September, with net mortgage borrowing reaching its highest level since March. It’s customary to see a second surge in the property market after the summer, but nonetheless, this is a welcome shot in the arm for lenders, with approvals for house purchases also at their highest since the spring. The drop in remortgage approvals for a fourth consecutive month highlights that many borrowers are still holding off making decisions. In particular, those coming off five-year fixed mortgages in the coming months will be waiting with bated breath to see if rates fall.
With the current uncertainty in the market, it will be interesting to see how borrowing will be impacted over the coming months.”
John Phillips, CEO of Just Mortgages and Spicerhaart, said: “While there has been plenty of talk of a holding pattern pre-Budget, today’s figures show that this isn’t the case for all borrowers. An increase in approvals in September demonstrates the appetite and demand that still exists in the market – whether that’s those pushing ahead with plans, or perhaps more likely, those that need to move rather than necessarily wanting to right now. Either way, the figures reflect what we are seeing across our estate agency branches and our brokerage with relatively robust figures for new buyer registrations, valuation requests and mortgage appointments.
There’s no doubt we are seeing an element of wait and see right now, which hopefully gives way to some pent-up demand once the Budget is cleared and everyone knows the lay of the land. With these figures in mind though, the message to brokers is to remain on the front foot and be there to support those that are navigating the market. Just as important is the role we play in nurturing confidence among clients, highlighting the many opportunities available and encouraging them to push on with their plans.”
Mark Tosetti, CEO of CAL (part of Movera), commented:
“An uptick in net borrowing and slight increase in net mortgage approvals indicates that there is still strong demand in the market and that we have emerged, tentatively from a slow summer. But the looming Autumn Budget is clearly continuing to put a damper on consumer confidence, with the latest data from Zoopla – released earlier this week – suggesting buyer demand is down 8% compared with last year and sales agreed have fallen by 3%.
However, as inflation fell short of the Bank of England’s 4% forecast this month, the MPC’s base rate decision next week could provide a lifeline for the sector and generate some more attractive interest rates from lenders.”
Simon Webb, managing director of capital markets and finance at LiveMore, commented:
“Buyer interest remains robust as we emerge from the summer slump, but clearly there is ongoing pent-up demand. What the market needs most is a period of stability in monetary policy so the MPC’s decision next week and the outcome of the Autumn Budget will be key.
For later life lending, the opportunity is clear. Borrowers aged 50 to 90+ still face limited awareness of their options, but demand is there. At LiveMore we continue to broaden access to a full spectrum of later life products, helping to keep housing transactions moving and enabling older borrowers to participate fully in the market.”
