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- Bank of England data reveals rise in the number of people taking out mortgages to buy a home
The number of mortgages approved for home purchases has reached levels not seen for more than two years, according to the latest figures from the Bank of England.
Banks signed 68,303 mortgages of this type in October, 3.3 percent more than in September and marking the fifth consecutive month of growth.
It means there were 41.5 per cent more approvals last month than the 48,259 seen a year ago in October 2023, and is the highest level of monthly mortgage approvals seen since August 2022.
However, analysts said the figures were taken ahead of Labor’s October 30 budget, which may still have an impact on the property market.
Anthony Codling, European head of housing and building materials at investment bank RBC Capital Markets, said: “This is good news for everyone involved in the UK property market.
‘Yes, this data refers to the period before the first Labor budget, but it shows that the foundations of the property market were being consolidated when the budget was announced.
“The November data may tell a different story, but for now it is a move onwards and upwards for UK housebuilders and the wider UK housing market.”
On the rise: Mortgage approvals rose for the fifth consecutive month in October to 68,300, the highest level since August 2022
The Budget confirmed that the current lower rates of stamp duty, introduced in 2022, will return to normal as planned in April 2025, and some believe this could give a temporary boost to the property market.
Richard Merrett, managing director of mortgage broker Alexander Hall, suggests the rise in mortgage approvals is due to buyers trying to avoid the extra tax.
Currently, movers pay stamp duty if their home costs more than £250,000, but in March 2025 this will drop again to £125,000.
A first-time buyer purchasing a property worth up to £425,000 currently pays no stamp duty. However, this limit will revert to the old threshold of £300,000.
This means the same £425,000 purchase will be subject to a tax bill of £6,205 from 1 April.
Merrett said: “This market strength and consistency is a trend that has been evident for much of this year and we expect it will now intensify considerably as we approach next April’s stamp duty relief deadline, given that no extension was granted during the fall budget.
“The mortgage sector is bracing for an extremely busy end to 2024 and an explosive start to 2025 as homebuyers look to act quickly to secure stamp duty savings.”
Home transactions increase in October
The number of property sales also reached the highest levels for 18 months, according to separate data published today by HMRC.
Housing transactions increased to six figures in October 2024, with 10 percent or 8,720 more moves than in September and 17,430 more than those completed in October 2023.
It means housing transactions reached their highest level since November 2022.
Simon Gammon, managing partner at Knight Frank Finance, suggests budget planning may have influenced the rise in sales and now expects them to stop rising.
“October was a busier month as buyers and sellers tried to close deals ahead of the budget, but sentiment has since worsened,” Gammon said.
‘Most lenders went up mortgage rates in the fifteen days following the Budget, which will keep activity under control for the foreseeable.
“We expect mortgage rates to remain static at least into the new year, and we won’t see any further significant declines until inflation data shows real improvements.”