Mortgage Approvals for House Purchases Highest since August 2022

James O’Donnell, director of research & consulting at TransUnion in the UK, comments on the recent Bank of England Money and Credit statistics.  

“The Bank of England’s latest Money and Credit report for August 2024 shows a continued rise in mortgage borrowing, with individuals borrowing a net £2.9 billion, slightly up from £2.8 billion in July, which continues to be the highest since November 2022. Mortgage approvals for house purchases remain strong, with an increase from 62,500 in July to 64,900 in August – the highest level since August 2022. 

“The increase in house purchase activity should also be taken in context of normal market seasonality. We’re moving away from peak summer activity into the winter low period. The question becomes one of whether borrowing activity will grow over Q4 due to lower interest rates, thus bucking the winter seasonal trend? We will be watching this closely over the next few months. 

“Consumer credit borrowing remains strong, with net borrowing reaching £1.3 billion, building on the £1.2 billion reported in July, but the rate of growth appears to be slowing down with August net borrowing slightly dropping to 7.6% year-on-year from the 7.8% seen in July. This indicates that we’re seeing balance growth stabilise on the back of lower price inflation in recent months across most consumer goods and services, and consumers might finally be finding their feet on stable ground. With these trends, lenders must remain vigilant in managing risk and ensuring responsible lending practices as these economic conditions continue to evolve.”