Mortgage borrowing at near two-year high as signs of confidence emerge

Business

The number of mortgages approved reached a near two-year high, according to Bank of England figures, as hopes of cheaper borrowing encouraged would-be buyers.

Mortgage approvals increased to 62,000 in July, a level not seen since September 2022, a sign that buyers were waiting for hopes of reduced interest rates and the associated lower mortgage bills.

Since September 2022 borrowing rates soared, kicked off by chaos in mortgage markets prompted by the Liz Truss mini-budget.

Money blog: NatWest customers unable to make payments

It was early in August that the first interest rate cut in four years was made.

Similarly, the amount of money borrowed to buy a house topped a level not seen in 18 months. Cheaper borrowing makes properties more affordable for prospective purchasers.

Please use Chrome browser for a more accessible video player

Mortgage rates of 3.5%-4.5% ‘new normal’ – Lloyds boss

Borrowing costs are still far higher than before the pandemic with the typical interest rate on newly drawn mortgages at 4.81%, Friday’s Bank data showed. Before the cycle of interest rate hikes, ultra-low mortgage rates of 1% or 2% were available.

More on Mortgage

Signs of confidence

Appetite for borrowing was also seen in other areas of the Bank’s data, demonstrating a growing desire to spend and expanding consumer confidence.

Credit card debt rose as households possibly spent on holidays or summer activities during the school break.


Follow Sky News on WhatsApp
Follow Sky News on WhatsApp

Keep up with all the latest news from the UK and around the world by following Sky News

Tap here

The cost of this borrowing rose, however, climbing to 21.28% for credit card debt and 22.56% for interest-charging overdrafts.

Elsewhere data from the UK’s largest building society showed house prices were growing at the fastest annual rate in nearly two years.

Articles You May Like

Prosecutors ask judge to drop charges against Donald Trump over 2020 election interference
What is methanol, how does it end up in alcoholic drinks, and how can you avoid it?
Fastest-Moving Stars in the Galaxy May be Piloted by Aliens, New Study Suggests
Ørsted’s largest solar farm in the world is now online in Texas
Expect the assisted dying debate to get even louder in days to come