House purchase mortgage approvals “increased slightly” by 500 to 66,500 in December, rebounding from a fall of 2,300 in November, Bank of England data shows.
Approvals for remortgages fell by 700 to 30,500, falling for a second consecutive month, according to the central bank’s latest Money and Credit report.
Net mortgage borrowing lifted by £1bn to £3.6bn in the period, following a decrease in net borrowing of £0.9bn in November.
The annual growth rate for net mortgage lending rose to 1.5%, from 1.3% in November, continuing an upward trend since last April.
The report adds that the ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 3 basis points, to 4.47% in December, the lowest since April 2023.
SPF Private Clients chief executive Mark Harris says: “Mortgage approvals for new purchases rose after November’s slip, which bodes well for the spring market.
“Remortgaging numbers dipped slightly again, but this could mean more borrowers stayed with existing mortgage providers instead of switching to a new lender, rather than borrowers moving onto standard variable rates and not refinancing at all.
“With swap rates continuing to fall and the markets predicting further base-rate reductions this year, it is hoped that this will feed through in the form of lower mortgage rates in coming weeks and months.”
Octane Capital Jonathan Samuels adds: “Any predictions of a seasonal slump in mortgage market activity have been dispelled today, with the latest figures from the Bank of England showing that mortgage approvals actually increased in December, despite the distractions of the festive season.
“This heightened activity was no doubt driven, in part, by buyers keen to make their move ahead of the impending stamp duty deadline this April.
“However, mortgage market health hasn’t been driven by the prospect of a stamp duty saving alone and, in fact, we saw some 31% more mortgage approvals complete over the course of last year when compared to 2023.”
Alexander Hall director of partnerships Stephanie Daley points out: “2024 was a year of very positive growth for the mortgage sector, with the number of approvals seen trending upwards as a result of a stabilising property market, with more of the same expected we throughout 2025.
“While the fast-approaching stamp duty deadline will help to cultivate buyer activity levels in the short-term, long-term health is also expected to be driven by the potential easing of loan to income caps which will help improve affordability, as well as the expectation of further base rate reductions.”
