3rd Mar 2025 10:28
(Alliance News) - UK mortgage approvals decreased slightly at the start of the year, but came in higher than expected, numbers from the Bank of England showed on Monday.
Net mortgage approvals for house purchases decreased by around 300 to 66,189 in January, the central bank's numbers showed. They had risen by roughly 400 to 66,505 in December.
The latest reading topped the FXStreet-cited consensus of 65,650.
Approvals for remortgaging increased by about 2,200 to 32,949 in January. They had fallen by around 700 to 30,766 in December, which followed a decline of about 200 in November.
The 'effective' interest rate, the actual interest paid on newly drawn mortgages increased by 4 basis points to 4.51% in January from 4.47% in December. The effective rate had ebbed in December from 4.50% in November. In November, it faded from 4.61% in October.
OnTheMarket analyst Jason Tebb commented: "With approvals for house purchases, an indicator of future borrowing, falling only slightly in January after December's modest uptick, market stability and buyer confidence continues to be steady. As the rate on newly-drawn mortgages rose again in January, along with the rate on outstanding mortgage stock, affordability remains a concern for borrowers. Two rate reductions in the second half of last year, followed by one last month is helping but mortgage rates are still higher than many have grown used to in recent years.
"Further reductions from the Bank of England would provide a welcome shot in the arm for the market, particularly with the stamp duty concession ending this month."
By Eric Cunha, Alliance News news editor
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