The recent study by property finance experts, Octane Capital, indicates that by the close of 2023, there’s an anticipated 11% yearly drop in mortgage sanction rates. However, a short-term uplift in activity is anticipated in the latter half of the year.
Octane Capital delved into past mortgage sanction records from the Bank of England to evaluate the present state of the market and project its position by year’s end.
Recent data reveals that in June of this year, 54,662 mortgages were sanctioned. This not only represents a 7% rise compared to the prior month but also marks the second straight month of rising approvals. Current mortgage sanction rates are notably 37% higher than the market’s lowest point of 39,825, recorded in January of this year.
Despite witnessing a recent uptick, the number of mortgage sanctions in the initial six months of the year only reached 291,578. This is notably 29% lower than the 410,244 sanctions observed in the first half of 2022.
Encouragingly, the momentum in the mortgage approval sector appears to be gaining pace. Octane Capital projects that by December this year, we might see monthly figures approaching 69,034.
Such a trend could echo the peaks of the previous year before the unexpected turns of September’s mini budget. The total mortgage approvals for the latter half of 2023 might even touch 377,927, marking a 30% ascent compared to the year’s first half.
Yet, with all this considered, the cumulative annual mortgage approvals by the end of 2023 are projected to be around 669,550. This indicates an 11% decline year-on-year, especially following 2022, which itself registered a 20% drop in total mortgage approval rates compared to its preceding year.
Octane Capital’s CEO, Jonathan Samuels, remarked, “The rising trend in interest rates, coupled with subdued buyer activity, suggests we’ll witness a decline in total mortgage approvals for the second year running in 2023.
However, it appears the most challenging times have passed. We are gradually distancing from the market troughs encountered earlier this year, anticipating encouraging growth in the latter half.
Despite this brief uplift, we’re not expecting an overall rise in annual mortgage approvals. Still, it does lay a robust groundwork for optimistic growth in 2024.”
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