Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
Mortgage Approvals Drop to 2023 Lows Amid Rising Rates
Mortgage approvals for house purchases in the UK fell to 56,200 in May, down from 66,000 in April, according to the Bank of England’s Money and Credit report. This marks the lowest level of approvals since December 2023, when the figure was 52,600, and is below the six-month average of 63,300.
Approvals for remortgaging also declined, dropping from 51,200 in April to 33,300 in May. The value of gross mortgage lending completed in May fell slightly to £27.1bn, compared to £27.4bn in April, but remained above the six-month average of £25.3bn. Mortgage repayments increased from £22.6bn to £22.9bn month-on-month, also above the six-month average of £19.9bn.
Net borrowing of mortgage debt declined from £2.9bn in April to £4.4bn in May, falling below the six-month average of £5.1bn and reaching the lowest level since May of the previous year. The annual growth rate for net mortgage lending rose slightly from 3.3% to 3.4% month-on-month.
The average rate on newly drawn mortgages increased from 4.08% in April to 4.22% in May. The average rate on the outstanding stock of mortgages remained unchanged at 3.92%.
For letting agents and inventory clerks, these figures indicate a slowdown in housing market activity, which may impact rental demand and property turnover. The data highlights ongoing affordability pressures for buyers as borrowing costs remain elevated.
Source: Mortgage Solutions