According to the Bank of England, the net mortgage approvals in December surged to 50,500 from 49,300. And the net approval for remortgaging in December surged to 30,800 from 25,700 in November.
It arises at the same time when the BoE data reveals that in December, the “effective” interest rate—that is, the real interest paid—on newly issued mortgages dropped by six basis points to 5.28%. For the first time since November 2021, the cost of borrowing decreased.
A personal finance analyst at Bestinvest, Alice Haine, stated: “For now, the better interest rate outlook is already feeding through to the market, with new buyers able to secure significantly better mortgage deals than the hyper-expensive products on offer last summer.“
“Buyers can take further comfort from January’s heated mortgage price wars as lenders battled to attract new customers and retain existing clients.”
Intending to remain at the top of the best-deal tables, lenders have lowered the costs of new fixed-rate offers in a mortgage price war.
As financial markets bet on the BoE lowering interest rates starting in the middle of the year, prices are anticipated to stabilize in 2024.
Given the strong levels of demand, director of Our Mortgage Broker Akhil Mair thinks official numbers will likely indicate an even greater increase in approvals in January.
He stated: “The surge in mortgage inquiries and subsequent applications since early December has been truly remarkable. There’s been a dynamic blend of first-time buyers eagerly stepping onto the ladder and seasoned home movers seeking new horizons.”
In December, borrowers repaid net £800m worth of mortgage debt, compared to net zero in November.
As per the figures, consumer borrowing in December declined to £1.2 billion compared to £2.1 billion in the previous month. December’s yearly growth in consumer credit was 8.5%, somewhat less than November’s growth.
- Published By Team Timeswire