There has been a small increase in the number of approvals for new mortgages, the BBC News website reports. Lenders approved 43,500 new mortgages in February, compared to 39,000 in January. This is despite higher borrowing costs, which have led to a slump in demand in the housing market.
A financial analyst at Quilter told the BBC that the upswing in mortgage approvals were the signs of ‘green shoots’ in the housing market.
Karen Noye of the organisation commented: “It’s clear that home-buyers are cautiously returning back to the market in early 2023 after the huge shocks at the back end of last year made many put their house hunts on ice. How this all feeds through to house prices is yet to be seen.”
House prices have fallen at the fastest pace for a decade, as the rise in interest rates has made getting on the property ladder or moving unaffordable for thousands more people. However, the Bank of England has said that the falling energy prices could mean that the slump will be much less severe than was first predicted.
Mortgage rates have fallen since highs of 6% were reached after the shock mini-budget announced by the former chancellor Kwasi Kwarteng in September 2022, although they are still almost double what they were this time last year.
It was initially feared that this would price first time buyers out of the market, but The Financial Times reports that the steep rise in average rental prices and the shortage of properties to let is instead causing buyers to lower their expectations and purchase smaller homes.
The latest figures show that buying is cheaper than renting in many regions of the country, and that record levels of first time buyers are opting for one and two bedroomed properties.
If you would like some advice from an IVA mortgage broker, please get in touch today.
Your home may be repossessed if you do not keep up with your mortgage repayments.
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