Proactive Investors - UK mortgage approvals rose more than expected in October, according to data by the Bank of England that suggests an easing in the housing downturn.
Net mortgage approvals for house purchases rose to 47,400 in October from 43,700 in September, data showed on Thursday - above the 45,000 forecast by economists but about 28% below its October 2019 level.
Net approvals for remortgaging also increased, to 23,700 in October from 20,600 in September.
The ‘effective’ interest rate - the actual interest paid - on newly drawn mortgages saw a 24 basis point increase and now sits at 5.25%.
Imogen Pattison at Capital Economics said with mortgage rates easing, the rise in mortgage approvals in October confirms that the trough in mortgage approvals is behind us.
But with mortgage rates unlikely to fall much below 5% until H2 2024, mortgaged demand is likely to remain weak by normal standards, she thinks.
She estimates that mortgage rates will hover close to 5% until the second half 2024 meaning the recovery from here will be muted, with approvals only rising to 600,000 in 2024 still someway short of their usual level of around 800,000 before the pandemic.