There were 48,690 mortgage approvals in the UK in April 2023, according to the Bank of England – a 5.4% dip on the March figure of 51,488.

The April 2023 total represents a year-on-year drop of 26% and is 25.6% lower than the average number of mortgage approvals between 2018 and 2019.

Borrowing of mortgage debt by individuals continued to decline from net zero in March to £1.4bn of net repayments in April. This is the lowest level on record, if the period since the onset of the Covid-19 pandemic is excluded.

The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages rose by 5 basis points, to 4.46% in April.

Thomas Pugh, economist at audit, tax and consulting firm RSM UK, believes the figures bode badly for the property market.

He said: “The fact that net mortgage lending turned negative in April, contracting by £1.4bn, the lowest level on record excluding the pandemic, suggests house prices have further to fall.

“The small drop in mortgage approvals, partly reversing the rise in March, reinforces this message. Indeed, higher interest rates and falling real incomes will limit buyers’ ability to meet high prices. We expect a peak-to-trough fall in house prices of between 5% and 10%.”

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Steve Seal, CEO of Bluestone Mortgages, said: “The drop in mortgage approvals, combined with inflation running at higher-than-expected levels, suggests a recovery is further away than anticipated. 

“As inflationary pressures persist, affordability challenges will remain prevalent for borrowers and prospective buyers alike.”

Emma Cox, MD of real estate at Shawbrook, said: “Buyer confidence remains diminished, as a further interest rate hike and year-on-year house price growth have suppressed demand. Those who still plan to progress with their property plans are likely to be keen to act swiftly to conclude deals and limit the risk of further base rate increases. Homeowners too will be keen to push on with remortgage plans ahead of a further possible rate hike.

“Landlords seeking to diversify their portfolios will also be looking to act quickly to mitigate the risks of current market uncertainty and benefit whilst rental demand remains high. 

“There are opportunities to capitalise on, with some landlords reportedly leaving the market and professional landlords being likely to want to make the most of these. 

“As well as restoring a sense of balance to the market, this should bring with it an injection of quality, much needed rental stock.”

Jonathan Samuels, CEO of Octane Capital, said: “The month-on-month reduction in mortgage approvals seen in April was always likely to materialise given the Bank of England’s decision to increase interest rates just one month prior. 

“What we’re now seeing is a knee-jerk reaction by buyers when facing these higher borrowing costs take shape as a reduction in mortgage market activity. 

“The good news is that this is likely to be a temporary reduction as they go back to the drawing board to ascertain just how much they can afford to borrow before returning to the fold.

“However, we’ve already seen the base rate rise again in May, with a further hike expected this month, so we can expect monthly mortgage approval trends to remain erratic, at best, for the foreseeable future.”

Nicholas Christofi, managing director of Sirius Property Finance, said: “Current mortgage market activity levels remain some way off the pandemic pace seen in recent years, with total approvals in April down 26% annually. 

“However, while a marginal monthly reduction reflects the uncertainty of the current landscape, almost 49,000 mortgages were approved in April, which is by far the second highest level seen so far this year.” 

Jason Ferrando, founder and CEO of easyMoney, said: “We’ve seen strong signs that the spring surge in market activity is well and truly underway, with mortgage approvals climbing quite considerably since the start of the year. 

“This remains the case despite a slight monthly reduction and with the exception of last month, April’s total is the strongest performance seen in the last six months. 

“Of course, the threat of yet another interest rate hike this month could prove problematic, with the ever escalating cost of borrowing already proving a sizeable hurdle and one that is causing buyers to tread more tentatively.”