Monthly mortgage approvals have reached their highest level in two years, data from the Bank of England has revealed.
The data, Money and Credit - September 2024, found that mortgage approvals net of cancellations for house purchases increased by 700 on a monthly basis to 65,000 in September.
This represented the highest level since August 2022 when the number of approvals stood at 72,000.
Similarly, approvals for remortgaging rose for the second consecutive month to 30,800 in September, a monthly rise of 3,100.
Savills director of research, Emily Williams, said this provides further evidence that house prices are set to continue growing.
She additionally pointed out the data showed a clear trend that buyers are increasing the size of their loans.
“The average mortgage advance has increased by 12 per cent year on year, compared to house price growth of 3.2 per cent over the same period according to Nationwide,” she said.
“As mortgage rates have eased, buyer confidence has lifted, and many have become more comfortable taking on larger loans.
“With markets expecting another cut to the base rate in November, we expect this trend to continue, creating more capacity for house price growth as we head into 2025.”
The data also reported that, in September, net borrowing of consumer credit by individuals decreased slightly to £1.2bn, down from £1.4bn in the previous month.
Within this, net borrowing through credit cards decreased from £0.5bn in August to £0.4bn in September, while net borrowing through other forms of consumer credit fell from £0.9bn to £0.8bn over the same period.
Knight Frank Finance managing partner, Simon Gammon, said: “The relatively small uptick in mortgage approvals during September is consistent with consumer confidence surveys showing how nervous people are about this week's Budget.
“I can't remember a fiscal event with so much speculation in the build-up. All sorts of policies and potential tax rises have been floated in recent months, so it's unsurprising that people feel hesitant about purchasing a new home.
“That said, provided there are no significant surprises, we do expect a more meaningful recovery to begin immediately after the Budget.
“Nothing that has been reported, including the changes to stamp duty, will be enough to deter the large numbers of purchasers that have put off moving until the outlook becomes clearer.”
tom.dunstan@ft.com
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