NoHPCinTheUK Posted July 31, 2023 Share Posted July 31, 2023 UK mortgage approvals rose unexpectedly in June despite further increases in interest rates. Bank of England statistics showed net mortgage approvals for house purchase rose to 54,700 from 51,100 the previous month, while approvals for remortgaging rose to 39,100 from 34,100. Analysts had expected the housing market to slow in a month when stubbornly high inflation figures led the central bank to raise interest rates sharply to 5 per cent — the highest level in 15 years — leading lenders to temporarily pull mortgage deals from the market while they repriced them. From the FT. It's over folks, it;s plateau time. Quote Link to comment Share on other sites More sharing options...
Dreamcasting Posted July 31, 2023 Share Posted July 31, 2023 Interest rates clearly not high enough then. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted July 31, 2023 Author Share Posted July 31, 2023 Or maybe price are finally dropping. We want to see mortgage approvals up and prices down. I don’t think we will see a return to the mean with these asking prices and mortgage rates. Quote Link to comment Share on other sites More sharing options...
2buyornot2buy Posted July 31, 2023 Share Posted July 31, 2023 11 minutes ago, NoHPCinTheUK said: Or maybe price are finally dropping. We want to see mortgage approvals up and prices down. I don’t think we will see a return to the mean with these asking prices and mortgage rates. Or could be down to the number of working days in June vs May Quote Link to comment Share on other sites More sharing options...
Dreamcasting Posted July 31, 2023 Share Posted July 31, 2023 I think another factor is wage increases. There is far too much money out there. Rates need ramping to at least 8% before we see anything noteworthy. Quote Link to comment Share on other sites More sharing options...
regprentice Posted July 31, 2023 Share Posted July 31, 2023 Approvals don't equate to completed sales. Likely a rush to lock in current rates before they rise further. Quote Link to comment Share on other sites More sharing options...
BubbleBuster Posted July 31, 2023 Share Posted July 31, 2023 10% increase in mortgage approvals. Not great news. Has the housing market bottomed already? Quote Link to comment Share on other sites More sharing options...
msi Posted July 31, 2023 Share Posted July 31, 2023 Zone 3 expanding? Quote Link to comment Share on other sites More sharing options...
Stewy Posted July 31, 2023 Share Posted July 31, 2023 Sounds like the buying opportunity of the 2020s has vanished. See you next decade folks! 🥲 Quote Link to comment Share on other sites More sharing options...
nero120 Posted July 31, 2023 Share Posted July 31, 2023 8 minutes ago, regprentice said: Approvals don't equate to completed sales. Likely a rush to lock in current rates before they rise further. Agreed. I saw three properties on my street go SSTC when deals were being pulled a few months ago, after sitting there for a while. Quote Link to comment Share on other sites More sharing options...
70PC Posted July 31, 2023 Share Posted July 31, 2023 5 minutes ago, Stewy said: Sounds like the buying opportunity of the 2020s has vanished. See you next decade folks! 🥲 I am waiting for the other shoe to drop Quote Link to comment Share on other sites More sharing options...
desiringonlychild Posted July 31, 2023 Share Posted July 31, 2023 8 minutes ago, Stewy said: Sounds like the buying opportunity of the 2020s has vanished. See you next decade folks! 🥲 That can't be true. Quote Link to comment Share on other sites More sharing options...
SlimJ Posted July 31, 2023 Share Posted July 31, 2023 14 minutes ago, regprentice said: Likely a rush to lock in current rates before they rise further. It sounds like a case of FOMO to lock in a rate just in case rates increase further. Quote Link to comment Share on other sites More sharing options...
Up the spout Posted July 31, 2023 Share Posted July 31, 2023 Approvals still remain well below the pre-pandemic average of 66,000 - strangely in all of the headlines talking about this unexpected rise, they all forgot to mention this point or that 'approvals' doesn't mean 'completions'. Quote Link to comment Share on other sites More sharing options...
jiltedjen Posted July 31, 2023 Share Posted July 31, 2023 when looking forward into potentially buying increasing rates there will be a constant churn of getting the earliest rate locked in as soon as possible. which does mean eventually approvals will drop through the floor as demand is pulled forward for the best possible rates. no-one will be accepting 2024 rates, which will further be compounded if people think rates will fall. will be like coming to a full halt after travelling at 100mph, mortgage market will be dead on its feet. I would say it’s a good sign, a rush for the last of the life-boats. before the inevitable sinking. Quote Link to comment Share on other sites More sharing options...
spxy Posted July 31, 2023 Share Posted July 31, 2023 Aren't montages approval normally up in June most years? The peak housing stock arrives March, April with peak mortgages around June July? Quote Link to comment Share on other sites More sharing options...
Bob8 Posted July 31, 2023 Share Posted July 31, 2023 59 minutes ago, Dreamcasting said: I think another factor is wage increases. There is far too much money out there. Rates need ramping to at least 8% before we see anything noteworthy. If you think high wages are a problem, you need to look at yourself in all sorts of ways. Quote Link to comment Share on other sites More sharing options...
nero120 Posted July 31, 2023 Share Posted July 31, 2023 21 minutes ago, spxy said: Aren't montages approval normally up in June most years? The peak housing stock arrives March, April with peak mortgages around June July? Yes I thought so too, not much of a bounce this summer from the previous winter, which was not entirely surprising given much higher rates. Quote Link to comment Share on other sites More sharing options...
mynamehere Posted July 31, 2023 Share Posted July 31, 2023 22 minutes ago, nero120 said: Yes I thought so too, not much of a bounce this summer from the previous winter, which was not entirely surprising given much higher rates. Yeah but the point is, all the rates and madness is only enough to slow things down a bit. Its not causing any systemic change to the market Quote Link to comment Share on other sites More sharing options...
fellow Posted July 31, 2023 Share Posted July 31, 2023 UK mortgage approvals rise despite surge in borrowing rates https://www.theguardian.com/business/2023/jul/31/uk-mortgage-approvals-rise-despite-surge-in-borrowing-rates Quote Mortgage approvals in the UK rose to their highest level since October 2022 last month amid signs of a scramble to secure home loan deals before an expected surge in interest rates. New data from the Bank of England revealed a surprise increase in demand for mortgages, with the increase from 51,100 in May to 54,700 in June confounding expectations in the financial markets of a fall to 49,000. The Bank said there had also been an increase in remortgaging activity – which rose by 5,000 to 39,100 between May and June. Despite June’s rise, mortgage approvals were still down by 15% year on year – and analysts said June’s pickup in demand was unlikely to be sustained. Thomas Pugh, an economist at the audit, tax and consulting firm RSM UK, said: “The rise in mortgage approvals probably represents a scramble to secure a deal before cheaper mortgage products were pulled from the market in the wake of the surge in interest rate expectations at the end of May. Quote Link to comment Share on other sites More sharing options...
msi Posted July 31, 2023 Share Posted July 31, 2023 MODS: Can this be merged? Quote Link to comment Share on other sites More sharing options...
fellow Posted July 31, 2023 Share Posted July 31, 2023 (edited) 8 minutes ago, msi said: MODS: Can this be merged? Yep, sorry I didn't spot this thread: . Edited July 31, 2023 by fellow Quote Link to comment Share on other sites More sharing options...
fellow Posted July 31, 2023 Share Posted July 31, 2023 (edited) if you take away the additional 5,000 remortgages, this would actually become a fall to 49,700 https://www.theguardian.com/business/2023/jul/31/uk-mortgage-approvals-rise-despite-surge-in-borrowing-rates Quote Mortgage approvals in the UK rose to their highest level since October 2022 last month amid signs of a scramble to secure home loan deals before an expected surge in interest rates. New data from the Bank of England revealed a surprise increase in demand for mortgages, with the increase from 51,100 in May to 54,700 in June confounding expectations in the financial markets of a fall to 49,000. The Bank said there had also been an increase in remortgaging activity – which rose by 5,000 to 39,100 between May and June. Despite June’s rise, mortgage approvals were still down by 15% year on year – and analysts said June’s pickup in demand was unlikely to be sustained. Thomas Pugh, an economist at the audit, tax and consulting firm RSM UK, said: “The rise in mortgage approvals probably represents a scramble to secure a deal before cheaper mortgage products were pulled from the market in the wake of the surge in interest rate expectations at the end of May. Edited July 31, 2023 by fellow Quote Link to comment Share on other sites More sharing options...
bluegnu Posted July 31, 2023 Share Posted July 31, 2023 There's some interesting points about the approval data on the BOE website (my highlighting)... Quote Approvals are the firm offers of lenders to advance credit secured on specific dwellings to their customers. This is the total agreed advance, irrespective of whether the mortgage offer has been accepted by the customer. The number and value of approvals are reported net of cancellations (where an approval has been made previously, but not taken up and the outstanding approval has been cancelled). All series for numbers of approvals are shown in actual numbers terms. Approvals secured on dwellings are broken down into three types: 'House purchase' covers approvals that are fully secured on residential property by a first mortgage. It includes existing borrowers transferring their existing mortgage to another property, lending to first-time purchasers and lending for buy-to-let purposes. 'Remortgaging' occurs when existing borrowers redeem their current mortgage in favour of a new one secured on the same property, but with a different mortgage lender. 'Other lending' occurs when existing borrowers increase the size of their current mortgage, with the same lender. It includes any loan secured on residential property which is used for home improvement, car purchase etc. https://www.bankofengland.co.uk/statistics/details/further-details-about-total-lending-to-individuals-data So in theory two existing homeowners could sell each other their houses both covered by existing mortgages but this would trigger 2 'House purchase approvals' even though nothing has really changed. Also, remortgaging is only recorded when a borrower moves to another bank; with the rapid rise and volatility in mortgage rates in recent months it reasonable to assume folks would be shopping around for the cheapest deals when they need to remortgage and so increase the number of recorded remortgages. Here's the approvals data with some history for context... https://uk.investing.com/economic-calendar/mortgage-approvals-211 Net mortgage lending is still incredibly low, only just above 0. Perhaps this could go some way in supporting the idea of existing homeowners just swapping houses alongside low numbers of ftb's entering the market. https://uk.investing.com/economic-calendar/mortgage-lending-664 Quote Link to comment Share on other sites More sharing options...
nero120 Posted July 31, 2023 Share Posted July 31, 2023 5 minutes ago, bluegnu said: There's some interesting points about the approval data on the BOE website (my highlighting)... https://www.bankofengland.co.uk/statistics/details/further-details-about-total-lending-to-individuals-data So in theory two existing homeowners could sell each other their houses both covered by existing mortgages but this would trigger 2 'House purchase approvals' even though nothing has really changed. Also, remortgaging is only recorded when a borrower moves to another bank; with the rapid rise and volatility in mortgage rates in recent months it reasonable to assume folks would be shopping around for the cheapest deals when they need to remortgage and so increase the number of recorded remortgages. Here's the approvals data with some history for context... https://uk.investing.com/economic-calendar/mortgage-approvals-211 Net mortgage lending is still incredibly low, only just above 0. Perhaps this could go some way in supporting the idea of existing homeowners just swapping houses alongside low numbers of ftb's entering the market. https://uk.investing.com/economic-calendar/mortgage-lending-664 Great info, thanks! Quote Link to comment Share on other sites More sharing options...
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