"Brokers play a fundamental role in helping homebuyers to navigate these unprecedented market conditions – which is undoubtedly a challenging task."
Net mortgage borrowing decreased from £5.9 billion in September to £4.0 billion in October, the lowest level since November 2021, according to the latest Money and Credit statistics from the Bank of England.
Gross lending increased to £28.2 billion in October from £27.2 billion in September, while gross repayments went up from £21.5 billion to £24.8 billion.
Mortgage approvals for house purchases decreased to 59,000, from 66,000 in September, and were below the previous six-month average (also 66,000).
Approvals for remortgaging with a different lender increased slightly in October, to 51,300 from 49,500 in September, and were higher than the previous six-month average of 47,300.
The ‘effective’ interest rate on newly drawn mortgages increased by 25 basis points, to 3.09% in October.
Conor Murphy, CEO of Smartr365, commented: “This morning’s numbers are indicative of the volatility we have recently been experiencing in the market – in the case of October, intensified by the impact of the ‘mini budget’ announced the previous month.
“The more recent Autumn Statement has substantially eased pressure on markets.
“Overall, the numbers remain robust and are a testament to the mortgage sector’s ongoing resilience. Key to maintaining this will continue to be instilling homebuyers with a sense of confidence – which the stamp duty cuts have gone some way to doing.
“Meanwhile, brokers play a fundamental role in helping homebuyers to navigate these unprecedented market conditions – which is undoubtedly a challenging task.
“Harnessing the power of technology to provide a seamless end-to-end mortgage journey can help take administrative pressures off brokers, allowing them to focus on giving advice whilst securing products and rates quickly before markets move again, all in all providing homebuyers with an optimal experience.”
Benjamin Blyth, founder of Leicester-based Houz Mortgages, said: “Mortgage approvals for house purchase were down again in October and a continued decline is likely in the months ahead as tighter affordability assessments come into force due to the use of higher ONS cost of living figures by lenders and higher stress rates. However, in October and November, I have seen very few first-time buyers put off their plans to buy a home, despite a sharp increase in rates and their quoted monthly payments. Demand among that demographic remains strong due to the simple fact that rents are astronomical. Lender affordability continues to tighten but this is only negatively impacting those with ongoing unsecured financial commitments such as loans, car finance and credit cards, which reduce mortgage borrowing capacity. I have seen a small increase in requests for additional borrowing from existing homeowners, with some looking to consolidate debt and get their finances in order while others replenish savings spent on things such as home improvements. These people are releasing cash from the increased equity in their homes to give them a cash safety net as we head into what the Bank of England predicts will be a protracted recession.”
Steve Seal, CEO of Bluestone Mortgages, added: “The aftermath of the mini-budget continues to take its toll, with a further drop-off in lending activity. While lenders are re-entering the mortgage market after extreme swap rate volatility, there are still strong headwinds lying ahead, which will undoubtedly have an enormous impact on the homeownership dream."
