2024 ‘will be tough’ as mortgage approvals to fall by 24%

UK mortgage approvals are set to fall by 24% next year and threaten to clog the housing market as would-be buyers and movers fail to get finance, research from GetAgent.co.uk reveals.

Between January and October 2023 an average of 47,602 mortgages were given the green light per month which would bring the total to 571,219 if that trend continued in the final two months of the year.

DROPPED

This will be the second year in a row that mortgage volumes have fallen significantly as they dropped by -20% between 2021 and 2022, from 937,093 to 752,131

From that peak in 2021 approvals are set to drop by -39% this year, amounting to 365,874 fewer mortgages.

Falling transactions have coincided with rate increases as the Bank of England (main picture) raised the base rate from 0.10% in December 2021 to 5.25% in August 2023 in a bid to combat double-digit inflation.

This has made mortgages far more expensive with many potential homeowners forced to delay their plans while investors are choosing to put their money into other assets offering better returns.

DIFFICULT YEAR

Colby Short, Co-Founder and Chief Executive of GetAgent.co.uk, says: “There’s no getting around it, 2023 has been a difficult year for the property industry, as higher mortgage rates have dragged down people’s ability to buy.

“The one positive is the Bank of England has left the base rate unchanged since August 2023 which is helping people adjust to a new normal as well as raising the potential for rate cuts in the new year.

“The market is likely to experience a recovery in 2024, though it surely won’t reach the heady heights of 2021 when the base rate was 0.10% and there was a stamp duty holiday for much of the year.”