Mortgage approvals fell to the lowest level since the first Covid lockdown was lifted in 2020, the Bank of England says.

The number of new mortgages for house purchases decreased to 46,100 in November from 57,900 in October, the lowest level since June 2020 (40,500).

Approvals for remortgaging went down to 32,500 in November from 51,300 in October, and were below the previous six-month average of 48,100, the Bank revealed in its latest Money and Credit statistics.

However, net borrowing of mortgage debt by individuals increased from £3.6 billion to £4.4 billion in November.

Industry reaction

Anthony Codling, founder of Twindig, says: “This is not the news the housing market was hoping for in the first week of the new year.

“Mortgage approvals are the key lead indicator for housing transactions, lower mortgage approvals today means fewer housing transactions tomorrow.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Mortgage approvals are always a good indicator of future direction of travel for the housing market.

“On the ground over the past few months, we have been seeing buyers trying to take advantage of mortgages arranged at lower rates, while others try to come to terms with higher repayments, as evidenced in this survey.”

Jonathan Samuels, CEO of Octane Capital, says: “Another reduction in buyer activity was always on the cards, as the tailwinds of the pandemic market boom subside and a generation of homebuyers adjust to the new norm of higher interest rates.

“But while the appetite of the nation’s homebuyers may have diminished somewhat, it certainly hasn’t vanished, and we continue to see a robust level of buyers entering the market despite the wider economic backdrop, with the total sum lent also exceeding expectation.”