UK mortgage approvals hit 18-month high - BoE

According to the latest Bank of England Money and Credit report, net mortgage approvals for house purchases rose from 60,497 in February to 61,325 last month, the highest since September 2022.

It was, however, marginally below analyst expectations for 61,500.

The effective interest rate – the actual interest paid – on newly-drawn mortgages decreased by 17 basis points to 4.73%.

Net consumer credit borrowing, meanwhile, increased to £1.58bn from £1.43bn in February. The rise was driven by net borrowing on credit cards, which jumped to £0.7bn from £0.5bn.

Net borrowing elsewhere, including car dealership finance and personal loans, was unchanged at £0.9bn.

Households also deposited an additional £8.5bn with banks and building societies, the highest net inflow since October 2022.

Peter Arnold, UK chief economist at EY, said: “The recovery in mortgage demand continued in March. However, the interest in mortgage rates over recent months appears to have taken some of the momentum out of the recovery.

“With swap rates having climbed further during April, and mortgage rates continuing to edge up in response, the EY Item Club expects the recovery in approvals to continue to cool in the near term.”

Stephen Perkins, managing director at Yellow Brick Mortgages, said: “Some weeks in March it felt like activity was starting to go through the gears, but the next week it stalled.

“With the BoE consistently stating rates will be higher for longer, and lenders starting each week by increasing their rates, the market is not going anywhere fast just yet.

“We really need that first rate cut from the BoE, which has the potential to ignite the mortgage and property markets.”