The number of mortgages being issued in the UK has seen a slight fall, according to new Bank of England figures.
In April a total of 65,974 mortgages were approved, compared with 69,531 in March, marking the lowest number of approvals since June 2020. At the same time the net borrowing of mortgage debt by individuals also fell, dropping to £4.1 billion in April from £6.4 billion in March.
This may reflect a combination of influences that could see the hitherto booming housing market cooling off significantly. As well as reduced affordability caused by rising prices, the squeeze on incomes caused by high inflation and the recent increases in interest rates, raising mortgage costs, could all play a part.
Those keen to buy a home in the East Midlands may benefit from speaking to an online mortgage advisor in Derby to establish what the best options may be for them in the current market.
If the property market does tail off it will not be unexpected, with many experts arguing that the economic tailwinds have been making it a matter of time before this happened.
For example, last month the Royal Institution of Chartered Surveyors said its latest member survey had shown sales and enquiries holding up well, but observed that “contributors are anecdotally preparing themselves for some market adjustments given the recent rate rise and the pressure on household budgets.”
The other factor to consider is likely changes in the base rate, with more increases expected. The rate was increased by 0.25 per cent to one per cent at the May meeting, with the next decision due on June 16th.
May’s vote saw a 6-3 verdict in favour if the action taken, but the other three favoured a 0.5 per cent rise. That may suggest there will be strong pressure to increase the base rate further next month and beyond as the battle against inflation continues, the key question being how much and how fast.
Among the topics prospective buyers might want to discuss with mortgage experts is whether a fixed-rate deal is the best option in light of the possibilities of significant further base rate increases.
