Mortgage approvals
UK Mortgage approvals are the key leading housing market indicator, in our view. A mortgage approval today typically leads to a housing transition in three months time. October was an important month for UK mortgage approvals as it marked the first set of data we have had since the end of the stamp duty holiday. Mortgage approvals fell, as they were expected to, but not by as much as we may have thought.
Latest UK Mortgage approvals
Key UK mortgage approval statistics and figures:
- May 2022: 66,163
- Up 0.1% on April 2022
- Down 23.4% on May 2021
- 5 year average 69,000
- 10 year average 66,430
- 20 year average 75,000
- Average since Oct 1986 83,310
Chart of recent UK mortgage approvals
The data for this chart can be found at the end of this article
UK mortgage approval commentary
Mortgage approvals in May 2022 were 66,163, which was more than 23% below their level a year ago (86,388), and 0.4% below their ten-year average of 66,426. Whilst mortgage approvals remain firm and in line with longer erm trends it is likely, in our view, that rising mortgage rates and rising living costs will start to dampen homebuyers' homebuying appetites. Whilst we might only be at the foothills of the inflation and mortgage rate ascendancy, these cost increases are starting to bite. Whilst there is nothing to worry about yet, we are starting to see the UK housing market starting to cool a little. If house prices continue to rise the housing finance cycle suggests that mortgage lending will follow suit, as house prices rise lenders have a bigger (more valuable) asset on which to secure future lending
Chart of long term UK Mortgage approvals
Credit Conditions Survey
The latest Bank of England Credit Conditions survey (14 Apr 22) reported that lenders are expecting the supply of mortgages to reduce in the next three months. This is the first time mortgage supply has been expected to reduce since Q3 2020. No doubt the increased costs of living and rising trajectory of bank rate are on lender's minds. The majority of house purchases are funded by a mortgage and as we saw during the Credit Crunch the supply of mortgages is critical to the overall health of the housing market. Whilst the COVID-19 pandemic did little damage to the housing market a reduction in mortgage supply, if significant, could knock it for six. We often say that the mortgage approvals data is the key lead indicator for the UK housing market and we will be watching the mortgage approval data with eagle eyes to see if they indicate any problems ahead.
Future publication dates for UK Mortgage approvals
- June 2022 Data - 29 July 2022
- July 2022 Data - 30 August 2022
- August 2022 Data - 29 September 2022
UK Mortgage approval data since January 2018
| Date | Mortgage Approvals ('000) |
| Jan 18 | 66.9 |
| Feb 18 | 64.0 |
| Mar 18 | 63.6 |
| Apr 18 | 63.6 |
| May 18 | 65.0 |
| Jun 18 | 65.6 |
| Jul 18 | 64.9 |
| Aug 18 | 66.2 |
| Sep 18 | 65.6 |
| Oct 18 | 67.1 |
| Nov 18 | 64.5 |
| Dec 18 | 64.3 |
| Jan 19 | 65.9 |
| Feb 19 | 65.3 |
| Mar 19 | 62.6 |
| Apr 19 | 66.7 |
| May 19 | 66.1 |
| Jun 19 | 67.1 |
| Jul 19 | 68.7 |
| Aug 19 | 67.6 |
| Sep 19 | 66.6 |
| Oct 19 | 64.6 |
| Nov 19 | 64.4 |
| Dec 19 | 66.0 |
| Jan 20 | 69.3 |
| Feb 20 | 72.9 |
| Mar 20 | 56.7 |
| Apr 20 | 15.8 |
| May 20 | 9.3 |
| Jun 20 | 40.5 |
| Jul 20 | 68.2 |
| Aug 20 | 86.7 |
| Sep 20 | 92.7 |
| Oct 20 | 98.7 |
| Nov 20 | 104.5 |
| Dec 20 | 101.6 |
| Jan 21 | 97.5 |
| Feb 21 | 87.4 |
| Mar 21 | 82.6 |
| Apr 21 | 85.3 |
| May 21 | 86.0 |
| June 21 | 79.9 |
| July 21 | 75.5 |
| August 21 | 73.5 |
| September 21 | 71.9 |
| October 21 | 67.4 |
| November 21 | 67.7 |
| December 21 | 70.3 |
| January 22 | 73.3 |
| February 22 | 70.3 |
| March 22 | 69.6 |
| April 22 | 66.0 |
| May 22 | 66.2 |
Source: Bank of England
Bank of England Statistical Tables