In a recent report by the Bank of England, the number of mortgages approved in the UK saw its highest peak since September 2022, a period significantly affected by the bond market’s reaction to Liz Truss‘ term as Prime Minister.
February witnessed a notable increase in mortgage approvals to 60,383, a rise from the revised figure of 56,087 in January and surpassing the expectations of economists, who had predicted a modest increase to 56,500.
Furthermore, the data revealed a substantial growth in net approvals for remortgaging, climbing to 37,700 from the previous 30,900.
This uptick indicates a rebound in Britain’s housing market, buoyed by the anticipation of a reduction in the Bank of England’s interest rates from the 16-year pinnacle of 5.25%.
Market predictions are leaning towards a rate cut around June or August, with forecasts suggesting a decrease to approximately 4.5% by the end of 2024.
Adding to the optimistic outlook, mortgage lender Nationwide reported that March saw house prices increase at the most rapid annual pace since December 2022.
Despite the encouraging signs in the housing sector, consumer credit growth experienced a slight deceleration, expanding at an 8.7% annual rate in February, a dip from January’s 9.0%.
The figure for net unsecured lending in February also fell short of expectations, with a rise of 1.378 billion pounds, which was below the anticipated 1.6 billion pounds.
These figures reflect a nuanced picture of the UK’s financial landscape, indicating a gradual recovery in the housing market amid fluctuating consumer credit trends and financial forecasts.