Sector welcomes mortgage approvals rise in Feb – Mortgage Finance Gazette

Net approvals for remortgaging also increased, from 30,900 to 37,700 during this period and the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 29 basis points, to 4.90% in February.

SPF Private Clients  chief executive  Mark Harris commented: “Mortgage approvals for new purchases rose again to their highest level since September 2022 as lower mortgage rates boosted borrower affordability and confidence. Our brokers have certainly seen an increase in activity and enquiries.

“Remortgaging numbers also increased as borrowers shopped around to take advantage of some of the better mortgage rates available.”

He added that as rates continued to move in the right direction, borrowers will be hoping lenders reduce rates a little further in coming weeks to assist with affordability.

Saffron for Intermediaries  head of business development Tony Hall said: “These figures are further confirmation that the housing market has seen a bumper recovery in 2024, after a volatile 2023. With inflation slowing to 3.4% in February, we are optimistic that borrowers will be able to benefit from greater certainty and stability in the market this year.

“We haven’t quite reached that point yet, however. In the last week, we have seen some lenders drop rates, while others have put them up, showing the off-beat rhythm of mortgage pricing at the moment as lenders wait for swap rates to settle.”

He added: “Other lenders are turning to new ways to help release the pent-up demand that has built up through a period of higher rates. For example, lenders are considering innovative products, such as 99% LTV mortgages, in an attempt to help first-time buyers onto the ladder.

MT Finance director Gareth Lewis said the BoE had produced positive and encouraging figures. “More people are looking to borrow, and it’s a good sign when house purchase numbers are moving in the right direction. Buyers are comfortable that the interest rate environment is settled and are willing to put their hands in their pockets and buy a property.”

He concluded: “With remortgaging to another lender increasing, it is a further sign that the interest rate environment in moving in the right direction as more borrowers are looking at their options, rather than taking the easier route of a product transfer. If they are going through the rigmarole of remortgaging with another lender, they have to be offering something appealing.”