Mortgage approvals have surged as homebuyers rush to secure loans ahead of further interest rate hikes, the latest figures show.
The increase comes amid warnings about growing “headwinds” facing the housing market, which is already slowing in the face of rising inflation and the economic turmoil caused by the chancellor’s mini-budget.
In response to uncertainty, many mortgage products have been withdrawn by lenders.
The industry has also said that stamp tax cuts introduced as part of the package to boost home sales have been “wiped out by the tsunami of market volatility since then.”
According to the Bank of England’s Money and Credit report, some 74,300 mortgage approvals were registered in August, 16% more than the 63,700 the previous month.
This is the highest level since 74,500 approvals were recorded in January and follows a drop in previous months.
Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, said: “The sudden jump in mortgage approvals for home purchases in August to their highest level since January is likely to reflect people trying to get loans ahead of increases. expected in mortgage rates, rather than a fundamental strengthening of asking.”
Revolution Brokers founding director Almas Uddin said: “Mortgage approvals have continued to skyrocket in recent months, despite mortgage rates rising in line with numerous base rate increases by the Bank. from England.
“This has been driven by a sense of urgency from the nation’s homebuyers, who are eager to secure what are still quite reasonable rates in anticipation of further increases to come this year.”
Meanwhile, the Nationwide Building Society reported that home price growth stalled month-over-month in September, but on a year-over-year basis, property values were still 9.5% higher than a year earlier.
Realtors said there could be some renegotiations against a backdrop of rising interest rates, and if this becomes a trend, it could hit home prices.
Across the UK, the median house price in September was £272,259, Nationwide said.
Robert Gardner, chief economist at Nationwide, said: “In September, annual house price growth slowed to single digits for the first time since October last year, although, at 9.5%, the pace of increase stayed solid.”
He added: “By lowering transaction costs, the stamp duty reduction may provide some support to activity and prices, as may labor market strength, assuming it persists, with the unemployment rate at its lowest ever.” since the early 1970s”.
“However, the headwinds are getting stronger, suggesting the market will slow further in the coming months.
“High inflation is putting significant pressure on household budgets, with consumer confidence falling to record lows.”
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Andrew Montlake, managing director of mortgage broker Coreco, said: “The days of double-digit growth may not be back for long.
“The level of uncertainty in the markets, and felt by consumers, is off the charts.
“The brief spike in sentiment caused by the stamp duty announcement on Friday has been washed away by the tsunami of market volatility since then.”