Source: FT Adviser —
Mortgage approvals fell for a fourth consecutive month in December 2022, reaching the lowest level seen since May 2020, during the first lockdown.
Statistics released today (January 31) from the Bank of England showed that mortgage approvals dropped to 35,600 in December, from 46,200 the month before.
Net borrowing fell from £4.3bn to £3.2bn in the final month of 2022, with mortgage brokers saying the decrease was unsurprising given the continued impact from the “mini” Budget and the usual seasonal lull.
“December was probably the slowest month I have seen in 10 years and this data highlights that,” broker and director of Verve Financial, Gary Boakes said.
However, Boakes and other brokers have said the market has improved since December’s lull.
“Nobody was interested in doing anything and people were simply waiting to see if rates continued to fall in January. Two year fixed rates are now hot again and the appeal of tracker products is disappearing quickly.
“Despite the chaos caused by Liz Truss’s ‘mini’ Budget, we have since had months of positive news of rates reducing, which has culminated in a busy January,” Boakes said.
Today’s BoE figures also showed that the ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 32 basis points to 3.67 per cent in December.
R3 Mortgages director, Riz Malik said he was surprised lenders were not quicker to reduce rates in January.
Earlier this month, a handful of high street lenders signalled cuts to their fixed rates with some brokers having said 10-year fixes are likely to fall below 4 per cent very soon, with five and two-year fixed rates likely to follow suit by the summer.
;
