2025 could see mortgage approvals hit their highest annual total since 2021, as research by award winning mortgage adviser, Alexander Hall, estimates that the market could see a 13.4% increase due improving market sentiment, driven by wider economic stability and greater mortgage affordability.
Alexander Hall analysed Bank of England data looking at mortgage approval levels across the UK property market over the last two decades, before using this historic data to forecast how the market is likely to perform in 2025.
The analysis shows that 2024 was a year of far greater stability for the UK property market, particularly with respect to the level of buyer activity seen across the market.
In total, there were some 754,983 mortgages approved for potential buyers, marking a 30.8% increase on the market lull seen the previous year in 2023 when just 577,173 mortgages were approved.
In fact, whilst 2023’s total of 577,173 was the lowest annual total seen since 2010, the 754,983 approvals seen throughout 2024 was the highest annual total since 2021, when the pandemic property market boom was in full swing, driven by the original stamp duty holiday.
Despite the fact that 2025 is set to see current stamp duty thresholds revert back to their previous levels, the forecast by Alexander Hall anticipates that it will be another year of growth for the mortgage sector.
The firm estimates that we could see 856,346 mortgage approvals take place over the course of the year, a 13.4% increase on 2024.
Stephanie Daley, Director of Partnerships at mortgage advisor, Alexander Hall, commented:
“2024 was a far better year with respect to mortgage market activity and we saw the number of approvals taking place climb considerably when compared to the previous year.
However, it’s fair to say that there was a slight air of disappointment given that we only saw two base rate reductions and this didn’t bring the improvement to mortgage affordability levels that many had hoped.
The good news is that 2025 is set to be an even stronger year for the sector and we’ve already seen a welcome boost in the form of an early base rate reduction, but unlike last year, we’ve also seen lenders reducing rates in anticipation of improving market conditions.
Data Tables and Sources
- *Historic mortgage approvals data sourced from Bank of England.
- 2025 mortgage approval estimate based on the last 20 years of historic mortgage approvals data (2005 to 2024) and formed using an ETS (exponential smoothing) forecasting model including interpolation, accounting for seasonality, and based on a middle bound confidence interval.
- You can view the full data tables and sources online here.
