Mortgage approvals in the UK have surged to their highest level in over a year, according to new figures released by the Bank of England.
The central bank’s latest Money and Credit report revealed that 65,945 home purchase mortgages were approved in April.
This marks a notable increase from the 63,979 recorded in March and surpasses the monthly average of approximately 63,100 seen over the preceding six months.
This uptick in activity comes despite a challenging economic landscape, characterised by rising mortgage rates in recent months.
Economists are anticipating further interest rate increases later this year, driven by persistent inflationary pressures.
Meanwhile, approvals for remortgaging, specifically for those switching to a different lender, remained largely consistent with the previous month’s figures.
Meanwhile, consumer credit borrowing was unchanged at around £1.9 billion for the month, with net borrowing through credit cards rising to £0.8 billion from £0.7 billion in the previous month.
Thomas Pugh, chief economist at RSM UK, said: “Decent growth in consumer credit and another rise in mortgage approvals suggests households were unphased by the Iran war in April.
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“However, some of this is due to people bringing forward activity to capture lower interest rates and it is difficult to see how that positive momentum lasts.
“The recent drop in oil prices, even with yesterday’s rebound, should help bring some normality back to the mortgage market, especially if the Bank of England takes a relatively measured view on the outlook for interest rates at its next meeting later this month.
“Indeed, financial markets are now pricing in just one rate hike, albeit with a risk of a second.”
Matt Swannell, chief economic adviser to the Item Club, said: “April’s increase in mortgage activity came despite the sharp rise in mortgage rates in recent months, but it likely reflects Easter-related distortions that will soon unwind.
“Net mortgage lending fell to £4.4 billion in April, from £6.8 billion a month earlier.”