Mortgage Approvals Hit Six Month High

21st February 2024
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Buyer confidence is returning

While there are many factors which influence demand for homes, interest rates and how much people each month for their mortgage is a critical influence. At Anthony Jones Properties, we speak with buyers and vendors every day, and we know the challenges people face. There is hope that things are improving for buyers as we move further into 2024, especially with respect to mortgage approvals.

The latest figures reveal that UK mortgage approvals surged to a six-month high in December, reaching 50,500, up from 49,300 in November. A notable aspect is the increase in net approvals for remortgaging, which rose to 30,800 in December from 25,700 the previous month.

Mortgage rates are falling

This uptick in mortgage approvals aligns with a drop in the average mortgage rate, marking the first decrease since November 2021. The "effective" interest rate on newly drawn mortgages fell by six basis points to 5.28% in December. Lenders are engaging in a competitive mortgage price war, reducing the costs of new fixed-rate deals to secure top positions in the best-deal tables.

Industry experts’ thoughts on mortgage rate changes

We use our experience in the market, and guidance from leading names in the market to make sure we provide you with the best level of support with whatever housing move you are looking to make.

Jason Tebb, president of OnTheMarket, said: “With approvals for house purchases, an indicator of future borrowing, continuing to edge upwards in December, the pause in interest rate hikes is boosting market stability and buyer confidence. The end-of-year dip in confidence and activity which we might have expected failed to materialise. The new year has got off to a promising start with an increase in buyer enquiries on the back of the reduction in mortgage rates. With the Bank of England expected to start cutting base rate at some point this year, buyers are increasingly confident as to what they can commit to and afford.”

Jason Tebb concluded by saying: “With property prices off their peak, that’s no bad thing for the overall health of the market as transaction numbers are more important. Sensible pricing should encourage buyers who may have been sitting on their hands to get on with their move and take advantage of more competitive mortgage rates.”

Jason Ferrando, founder and CEO of easyMoney, also spoke on this topic, saying: “Mortgage approvals climbed for the third consecutive time in December, suggesting that despite interest rates remaining at 5.25%, buyers are keen to make their move in 2024. However, they are advised to tread with caution while doing so, as the cost of borrowing remains high and there’s no guarantee that this is going to change any time soon. Over borrowing now with the expectation of lower rates further down the line could find them in financial difficulty when they do come to renew their mortgage terms.”

So, while there is cause for optimism, there is a need for realism too, even if buyers are likely to feel more positive about what comes next. If you plan on selling your home, we’ll make sure you are well-placed to meet the needs of buyers while ensuring you set out to achieve the best possible outcome for your needs.

Contact Anthony Jones for all Darlington property matters

If you are looking for help with any matter of the Darlington property market, it is best to speak to property professionals. No one knows for sure what is going to happen next, so we won’t claim to have all the answers, but the Anthony Jones team is keen to help you as best we can. If you would like to contact us over housing matters, please call us today on 01325 776424.

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