UK mortgage approvals exceeded expectations in October, with net mortgage approvals for house purchases rising to 47,400 in October from 43,700 in September, the latest Bank of England data showed yesterday.

The number in October was well above economists’ expectations of 45,000 and the highest since July, but more than a quarte – 28% – below its level in October 2019, before the pandemic.

Net approvals for remortgaging increased to 23,700 from 20,600 in the corresponding period.

The data released on Wednesday suggests an easing in the housing downturn, after a fall in the cost of some popular mortgage products following the Bank of England’s decision to leave interest rates unchanged at 5.25% in September and November.

Jason Tebb, chief executive of property search website OnTheMarket.com, said it was “clear that the pause in interest rate hikes has boosted market stability and buyer confidence”.

Emma Cox, MD of Real Estate at Shawbrook, commented: “Buyers are sticking to their property plans, even with the highest mortgage rates in over a decade. With mortgage interest rates more stable since the summer, sellers and buyers can plan better and the housing market looks better for it.”

Frances McDonald, director of research at Savills, added: “October’s mortgage approvals data highlights that some confidence is beginning to return to the mortgage markets, as rates have continued their downward trend since the summer. But buyers are still adjusting their budgets to the higher interest rate environment.

“As a result, Savills has forecast that cash buyers will make up 43% of the transactions in 2023 – far higher than the 35% seen pre-pandemic.

“TwentyCi data for November also shows that net agreed sales were only -5% below their 2017-19 average for the month. An improvement on the -16% and -14% seen in October and September, respectively. However, this activity continues to be enabled by a 27% increase in the number of price changes over the same period.

“Next year transactions are forecast to improve to 1,040,000, once we see a more meaningful decrease in mortgage rates, before increasing to 1,160,000 by 2026 as mortgaged buyers begin to take a greater share of the market again.”