There was £20.6bn provided in gross mortgage lending in April, the highest total since January last year, data from the central bank showed.
The Bank of England’s Money and Credit figures revealed this was marginally higher than the previous month’s total of £20.5bn in gross mortgage lending.
Meanwhile, gross mortgage repayments fell from £19.4bn in March to £19bn in April.
On net, people borrowed £2.4bn of mortgage debt in April, which was a significant increase on the £500m borrowed in March. The Bank of England’s data showed this was also the first annual growth rate for net mortgage lending since October 2022.
This rose from a record low of 0.1% in March to a growth of 0.2% in April.
Muted mortgage approvals
The data showed there were 61,100 approvals for house purchases in April, little changed from 61,300 in March.
Approvals for remortgages fell from 33,500 to 29,900.
Although there were month-on-month decreases in mortgage approvals, industry professionals suggested this still indicated some stability in the market, but noted borrowers were hesitant.
Holly Andrews, intermediary team manager at Saffron for Intermediaries, said: “It is important to remember that today’s figures come off the back of six months of growth in mortgage approvals. While the slight dip today reflects the current financial pressures faced by borrowers, we expect activity to start increasing again as we move into the summer – a peak time for property transactions.
“When you add in inflation at its lowest level in almost three years, we can expect potential buyers to be eager to take the next step onto the property ladder.”
Frances McDonald, director of research at Savills, added: “Mortgage approvals in April remained relatively unchanged from the previous month at 61,100, on a seasonally adjusted basis. But they were 26% higher than April last year, highlighting that a greater range of buyers have been active in the market, following more stability in the cost of fixed rate mortgages.
“This increase brings them back to 94% of their pre-pandemic level, as the average mortgage rate on new lending averaged at 4.74% in April, down from 5.19% at the start of the year.
“However, affordability remains the greatest driver in the mainstream housing markets, and so the pace and scale of interest rate cuts will continue to have a more significant impact on activity than the timing or outcome of the upcoming general election.”
Emma Cox, managing director of real estate at Shawbrook, said: “A slight dip in mortgage approvals reflects the hesitancy creeping back into the market.
“Following the announcement of a July general election and uncertainty surrounding rate cuts, we are still seeing signs of volatility, and until there is more certainty and a clearer downward trend in inflation, lenders may adjust their rates accordingly. This means that those looking to secure new deals could face higher rates in the short term.”
Increases in average mortgage rates
The interest rate paid on newly drawn mortgages in April averaged at 4.74%, just one basis point higher than in March.
Meanwhile, the rate on the outstanding stock of mortgages rose by seven basis points to 3.57%.
Mark Harris, chief executive of SPF Private Clients, said increases reflected “some higher mortgage pricing on the back of rising swap rates. Since then, inflation has moved closer to its 2% target, making an interest rate cut increasingly likely.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
