Mortgage Approval Rates Bounce Back, According to the Latest Bank of England Statistics
Andy Piggott, director of core credit at TransUnion in the UK, comments on the Bank of England’s Money and Credit update:
“The latest Money and Credit statistics from the Bank of England show that mortgage approval rates have increased for the first time since August 2022, in a positive sign for prospective purchasers. This may be driven by the greater willingness to lend now that there's more certainty in the long-term view of rates.
“However, with persistent inflation and high borrowing costs, affordability will be a concern for many looking to buy property or move home, despite a drop in prices. That’s reflected in the decrease in net mortgage lending, down from £2 billion in January to £0.7 billion in February.
“There are also financial pressures on those needing to remortgage, with the latest Bank of England base rate reaching 4.25% in March and the effective interest rate paid on newly drawn mortgages up from 3.88% to 4.24%. The rapidly changing picture means it’s more important than ever for lenders to have in place robust affordability measures, underpinned by data, to ensure consumers are protected.
“Additionally, recent guidance from the FCA has set out ways that lenders can support existing mortgage borrowers that are facing significantly higher costs as they come to the end of fixed-term agreements – for example, by extending the term of their mortgage or temporarily making reduced monthly payments.”