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. Mortgage approvals dipped in September 2022.

 

Latest UK Mortgage approvals

Key UK mortgage approval statistics and figures:

 

Chart of recent UK mortgage approvals

UK mortgage approvals twindig anthony codling

The data for this chart can be found at the end of this article

 

 

UK mortgage approval commentary

Mortgage approvals in September 2022 were 66,789, which was 10.3% down on August 2022 and 7.3% below their level a year ago (72,061), and 0.5% below their ten-year average of 67,097. Whilst the drop in mortgage approvals in September 2022 appears large, and will certainly grab some headlines, we were more surprised by the robustness of the mortgage approvals levels in what was a very turbulent month. September saw a new prime minister, the loss of Queen Elizabeth II, a new King, a new Chancellor and a mini-budget. The housing market gave a big thumbs down to the September mini-budget and hundreds if not thousands of mortgage products were pulled from the shelves and quoted mortgage rates rose significantly as lenders reacted to the mini-budget. A month is a long time in politics and since 23 September we have had another new Prime Minister and another new Chancellor of the Exchequer and most of the proposals of the mini-budget have been reversed. The financial markets have welcomed the u-turns and, so far view Rishi Sunak and Jeremy Hunt as more appropriate guardians of the economy than the pairing of Truss and Kwarteng.   

 

Chart of long term UK Mortgage approvals

 

Chart UK mortgage approvals long run twindig anthony codling bank of england

 

Credit Conditions Survey 

The latest Bank of England Credit Conditions survey (13 Oct 22) reported that lenders expect the supply of mortgages to reduce during the next three months and mortgage rates to rise. The demand for mortgages from homebuyers is expected to fall, but demand for re-mortgaging to rise over the next three months. Mortgage supply reduced in Q3 2022 for the third quarter in a row and is expected to fall again in Q4 2022. The reduction in Q4 2022 may be bigger than the Credit Conditions Survey anticipates because the survey was conducted before the UK Government's mini-budget on 23 September. If the survey was conducted today, we expect that lenders' expectations for credit conditions in the coming months would be much lower than they were ahead of the budget. The Bank of England's bi-annual Financial Stability Report in July reported that in response to changes in the economic environment, banks are adjusting mortgage affordability tests to account for recent and expected increases in inflation and interest rates. And in the consumer credit market, intelligence suggests that given the considerable uncertainty in the economic outlook, banks are looking to target new lending towards borrowers with higher credit scores. 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

 

 

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 64.7
Nov 19 64.8
Dec 19 66.4
Jan 20 69.1
Feb 20 72.5
Mar 20 57.0
Apr 20 15.8
May 20 9.3
Jun 20 40.7
Jul 20 68.9
Aug 20 86.3
Sep 20 93.4
Oct 20 100.9
Nov 20 107.5
Dec 20 102.9
Jan 21 96.8
Feb 21 85.7
Mar 21 81.1
Apr 21 84.8
May 21 85.9
June 21 79.9
July 21 74.5
August 21 73.1
September 21 72.0
October 21 68.5
November 21 69.0
December 21 72.3
January 22 74.4
February 22 69.9
March 22 69.5
April 22 65.4
May 22 66.0
June 22 63.5
July 22 64.1
Aug 22 74.4
Sep 22 66.8

Source: Bank of England

Bank of England Statistical Tables