The latest mortgage approval figures from the Bank of England reveal a stable housing market, with 59,976 mortgage approvals for house purchases in June. Although this marks a slight decrease of 0.3% from May, the numbers are significantly higher—11.7%—than the 53,709 approvals recorded in June 2023. This is the third consecutive monthly decrease since the last increase in March, but there is growing optimism for a rebound, especially if the Bank of England cuts interest rates soon.
Industry Reactions and Analysis
Nathan Emerson, CEO of Propertymark, commented on the Bank of England’s Money and Credit Report: “Today’s figures show that the general election did not damage people’s confidence in borrowing money to purchase their next home in the way many may have anticipated. Momentum has sustained itself, however, now we have a newly elected government that is ambitious about building new homes, we hope that confidence increases further in the housing market. In addition, Propertymark is keen to see further confidence boosts with the Bank of England considering a cut in interest rates when they feel this is the right time to do so.”
Jonathan Samuels, CEO of Octane Capital, observed the minimal impact of the recent general election on mortgage market activity. “We’ve seen a marginal dip in mortgage market activity in the months leading up to the general election, although the extent of this reduction has been very minimal, with mortgage approvals remaining in or around the 60,000 mark on a monthly basis. Now that the political dust has settled, we expect to see the nation’s buyers returning to the fold, and this increase in activity should only strengthen as the prospect of an interest rate cut looms ever closer. We’re also seeing lenders act in anticipation of a reduction in the base rate, with the average daily swap rate already starting to decline in recent weeks.”
Market Outlook and Future Prospects
Emma Cox, Managing Director of Real Estate at Shawbrook, noted the resilience of mortgage approvals despite the general election’s dynamic: “Despite the added dynamic of the general election, mortgage approvals for house purchases have remained broadly stable as the market outlook becomes more positive, offering hope for landlords. Confidence appears to be returning to the market which is adapting to higher interest. Professional landlords are keen to secure deals, expand their portfolios, and diversify their strategies. High-yield options, such as HMOs and semi-commercial properties, are particularly popular as these landlords aim to grow their businesses.”
Jason Ferrando, Founder and CEO of easyMoney, echoed this sentiment: “Despite a momentary pause due to the noise of a snap election, mortgage approval levels have remained largely robust in recent months and this has provided a strong foundation for further growth. With the election now behind us, we expect there will be a significant uplift in the number of buyers looking to make their move over the coming months, and this will only be intensified as and when interest rates are reduced.”
The overall sentiment in the market is one of cautious optimism. With the potential for interest rate cuts on the horizon and a stable number of mortgage approvals, both buyers and landlords are looking forward to more favourable conditions. As the market adapts to these changes, the focus remains on maintaining confidence and supporting growth in the housing sector.
The post Steady mortgage approvals hint at market optimism appeared first on Landlord Knowledge - Landlord News, Information, Guides & Forum.Landlord Knowledge - Landlord News, Information, Guides & Forum - Providing essential and free landlord news, information, guides & advice.