Number of mortgage approvals made to home buyers dipped in November
The new year is off to a ‘promising start’ with a couple of lenders reducing their mortgage rates, one expert said.
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Your support makes all the difference.The number of mortgage approvals made to home buyers dipped in November, but remained above the monthly average seen over the past year, according to Bank of England figures.
Some 65,700 mortgage approvals for house purchases were recorded in November, which was around 2,400 lower than October but above the previous 12-month average of 60,400.
Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 300 to 31,200 in November but remained above the previous 12-month average of 30,000.
While affordability remains an issue for many buyers, the new year is off to a promising start with a couple of lenders reducing their mortgage rates
The annual growth rate for consumer credit borrowing slowed to 6.6% in November, from 7.3% in October, according to the Money and Credit report.
Consumer credit includes borrowing through methods such as credit cards, car dealership finance and personal loans.
Within the consumer credit figure, the annual growth rate for credit card borrowing decreased to 8.0% in November, from 9.4%. The annual growth rate for other forms of consumer credit (such as car dealership finance and personal loans) fell to 5.9% from 6.3%.
Households’ deposits with banks and building societies increased slightly by £0.2 billion in November, following net deposits of £18.8 billion in October, which had been the biggest figure recorded since £21.5 billion in December 2020.
Mark Hicks, head of active savings, Hargreaves Lansdown said: “A post-Budget pause marked the start of a seasonal slowdown in savings.
“Savers had been squirreling away cash ahead of the Budget, and after the announcement didn’t hit quite as hard as they had feared, they took their foot off the savings accelerator.”
It's possible consumers ran down savings to fund their early Christmas spending, rather than turning to much more expensive credit facilities
Laith Khalaf, head of investment analysis at AJ Bell, said the figures suggest that “consumers put the Christmas credit splurge on ice in 2024, especially seeing as November is now a key trading month because of discounting trends such as Black Friday, where retailers seek to bring festive spending forward.
“We’ll be getting trading updates from the UK retailers in the coming weeks which will confirm whether Christmas was a damp squib for the sector.
“Ahead of higher national insurance and minimum wage costs bedding in from April, weak Christmas trading would put extra pressure on retail coffers.
“It’s possible consumers ran down savings to fund their early Christmas spending, rather than turning to much more expensive credit facilities. In total consumers saved £0.2 billion with banks and building societies in November, down from a bumper £18.8 billion deposited in October.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Mortgage approvals for new purchases slipped, which comes as a surprise and suggests ups and downs for the market in coming months rather than a steady improvement.
“Remortgaging numbers dipped very slightly, but this could mean more borrowers stuck with their existing mortgage providers rather than switching to a new lender.”
Nathan Emerson, chief executive of property professionals’ body Propertymark said: “The impact of higher interest rates without doubt has had a profound impact across the housing market.
“Consumers need to feel a degree of confidence within their financial position to approach the buying and selling process.”
Jason Tebb, president of OnTheMarket said: “While affordability remains an issue for many buyers, the new year is off to a promising start with a couple of lenders reducing their mortgage rates.
“If others follow suit, this should encourage would-be buyers to take the plunge, making them more confident as to what they can commit to and can afford, particularly ahead of the stamp duty concession ending in March.”
The “nil rate” stamp duty threshold for first-time buyers is set to reduce from £425,000 to £300,000 from April. Stamp duty applies in England and Northern Ireland.