The latest analysis by specialist property lending experts, Octane Capital, shows that mortgage approval levels are forecast to decline by 11% annually come the end of 2023, although short-term positivity is expected with an uplift in activity during the second half of the year. 

Octane Capital analysed historic mortgage approval data from the Bank of England, looking at how the market is currently performing, as well as where it may stand come the end of the year. 

The latest figures show that 54,662 mortgages approved in June of this year, not only marking a 7% increase on the previous month but the second consecutive month approvals have climbed. Current mortgage approvals levels also sit some 37% above the market low of 39,825 seen in January of this year. 

But even with recent positive growth considered, the number of mortgage approvals seen during the first six months of this year totalled just 291,578, 29% less than the 410,244 approvals seen during the first half of 2022. 

The good news is that this uplift in mortgage approval market activity is set to strengthen, with Octane Capital forecasting that monthly figures could hit 69,034 by December of this year.

This would signal a return to the previous highs of last year before September’s mini budget rocked the boat and could see the total number of mortgage approvals seen during the second half of 2023 hit 377,927 – a 30% increase versus the first six months of the year. 

However, despite this late rally during the second half of the year, total annual mortgage approvals are estimated to sit at 669,550 come the end of the year. This would mark a 11% year on year decline, following 2022 which also saw total mortgage approval levels fall by 20% versus the previous year. 

CEO of Octane Capital, Jonathan Samuels, commented: 

“The upward trajectory of interest rates and the resulting reduction in buyer activity are expected to see total mortgage approval levels dip for a second consecutive year in 2023.

That said, it would seem that the worst is behind us and we are now starting to move away from the market lows seen earlier this year, with positive growth expected to materialise over the remaining six months. 

While this short-term positivity won’t be enough to bring about an annual increase in total mortgage approvals, it does set a very firm foundation for further positive growth in 2024.”

Data tablesData tables and sources can be viewed online, here.

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