The Bank of England published its mortgage approval data for April on Tuesday, with the figures showing approvals during the month fell to 65,974.
This is a sharp fall from the previous month of March, which saw 69,531 mortgages approved.
Despite this, the level seen in April is broadly in line with figures seen prior to the onset of the pandemic, whereby the 12-month average number of approvals sat at 66,683.
Figures from across the industry offered their reaction to the data.
Director of Henry Dannell, Geoff Garrett, commented:
“We expect to see mortgage approval levels continue along the downward curve that has already materialised in 2022, as rising inflation, living costs and interest rates gradually chip away at the number of homebuyers opting to borrow in order to buy.
This is an inevitable correction following a period of intense market activity and should be viewed as a return to pre-pandemic normality, rather than a post-pandemic market collapse.”
CEO of Octane Capital, Jonathan Samuels:
“While our unquenchable thirst for homeownership remains, we’re starting to see many lenders reign in the range of products they are offering, as well as the rates they’re prepared to offer them at.
The consequence of this is naturally going to be a reduction in buyer activity coming via the mortgage sector, as many homebuyers are now finding they simply can’t secure the home they want, with a mortgage that suits their financial situation.
However, those that can, are still entering a market that is desperately low on stock. So while mortgage market activity may be waning somewhat, property values are likely to remain robust.”
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown:
“The mortgage market hoisted yet another warning sign for property prices, as the number of mortgages being approved for future purchases fell again.
Mortgage approvals are a useful measure of the health of the property market because they indicate buyer enthusiasm over the coming weeks. The fact that approvals dropped below the pre-pandemic average in April is yet another sign of the heat coming out of the market.
It comes hot on the heels of news from Zoopla that house price growth fell again in April, the number of sellers being forced to slash the asking price is rising, and the length of time it’s taking to agree a sale is starting to increase. We also know mortgage companies are down-valuing properties they feel are overpriced and boosting the costs in affordability calculations – making it harder to borrow. At this stage, the property market is positively festooned with red flags.
We’re still not expecting average house prices to fall at this stage, but we can expect price rises to slow significantly, and the market to become increasingly sluggish as we go through the year.”
