Property speculators investment planning in Cheshire will have pricked up their ears at some good news for the UK housing market recently.
Consumers felt the twin benefits of lower mortgages and increases in real incomes. This reflects the overall positive trend pattern in the housing market, which has been bolstered by an improving economy.
The latest data from the Bank of England revealed that 65,600 new mortgages were approved in the UK in September, which amounted to the highest figure since August 2022. Paul Dales, the chief UK economist at Capital Economics, said that the rise in mortgage approvals reflected the decline in mortgage rates in recent months.
Online property platform Zoopla also confirmed this trend, saying that the level of new sales is now at its highest level since late 2020, with over 306,000 homes currently going through the purchase process.
Economists have also identified the drop in inflation to below 2% for the first time since April 2021 as another factor contributing to the economic recovery. This has given the Bank of England leeway to cut borrowing costs, the first reduction since the pandemic.
The ‘effective’ interest rate, or actual interest paid, on new mortgages was down by eight points to 4.76% in September. The impact of this has been to drive mortgages lower, thus creating more demand among potential buyers.
Consumer borrowing was also down, falling from £1.4 billion in August, not dissimilar to the average trend over the last half year.
