Mortgage approvals climb as rates come down

Data from the Bank of England shows that mortgage approvals totalled 47,400 October, up from 43,700 the month before. Net approvals for remortgaging increased from 20,600 in September to 23,700 in October. The increase in new home loans came as the Bank held interest rates on the back of inflation falling to 4.6%, leading a number of lenders to offer cheaper mortgage deals. The data also showed that gross lending fell from £18.1bn in September to £16.2bn in October. The average two-year fixed mortgage rate is now 5.56%, down from 5.77% a year ago, while the average five-year fixed mortgage rate is now 5.14%, down from 5.52%. Imogen Pattison, assistant economist at Capital Economics, said the “trough in mortgage approvals is behind us” but warned that with mortgage rates unlikely to fall much below 5% until the second half of next year, “demand is likely to remain weak by normal standards".

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