Lenders in the UK approved just 43,328 mortgages in September 2023, the lowest since the beginning of the year.
This article reports figures published in October 2023.
Remortgaging Approvals Also Fell
Net approvals for remortgaging also fell, to 20,600, the lowest since January 1999, according to Reuters. The collapse reflected the impact of the rise in borrowing costs, and how many homeowners had no choice but to stick with their existing mortgages and pay down their debts if and where they could.
Rising Costs
The increase in mortgage interest rates is on top of all the other expenses associated with purchasing a new home, such as stamp duty, building survey fees and fees for conveyancing. Homebuyers are having to shop around to keep their costs low and make sure they’re not paying for more than they need. For example, choosing the right level of building survey for the property they’ve settled on can help keep fees to a minimum.
Keeping the Balance
Although the Bank of England paused the rises in interest rates in September 2023, economists warned that the full impact of rises over the previous year had yet to reveal itself, as millions of households had still not reached the end of their cheaper, fixed mortgage deals and faced a significant hike in interest payments. Although the interest paid on new mortgages sat at just over 5%, the average rate on outstanding mortgages was still significantly lower at 3.14%.
Economists also warned that the impact could trigger a recession and a larger drop in house prices. Property portal Zoopla reported that house prices were falling faster than at any time since 2009. At the time, analysts were not expecting a recovery until homeowners started to feel the effect of falling rates.